The enforcement directorate (ED) on Saturday said it has conducted search and seizure actions at three premises related to edtech major Byju’s and its founder Byju Raveendran over alleged foreign exchange violations.
The agency, mandated with the investigation of offence of money laundering and violations of foreign exchange laws, alleged that during the searches it seized “incriminating” documents and digital data.
In a statement, the ED said that it has conducted searches and seizure action at three premises which include two business and one residential in Bangalore, in the case of Byju Raveendran and his company ‘‘Think & Learn Private Limited’’ under the provisions of Foreign Exchange Management Act (Fema). Think & Learn runs the Byju portal.
According to the ED, its Fema searches revealed that the company has received foreign direct investment (FDI) of Rs 28,000 crore from 2011 to 2023.
Further, the firm remitted Rs 9,754 crore to various foreign jurisdictions during this period in the name of overseas direct investment.
The ED alleged that the company has booked around Rs 944 crore in the name of advertisement and marketing expenses including the amount remitted to foreign jurisdiction.
Further, it has not prepared its financial statements since 2020-21 and has not got the accounts audited which is mandatory. Therefore, the genuineness of the figures provided by the company is being cross-examined from the banks.
It said the action was taken on the basis of “various complaints” received by private people and alleged Byju Raveendran was issued “several” summons but he remained “evasive and never appeared” before the agency.
A spokesperson for Byju’s legal team said the ED action was a “routine inquiry” and the company has been “completely transparent with the authorities and have provided them with all the information they have requested.”
`We have nothing but the utmost confidence in the integrity of our operations, and we are committed to upholding the highest standards of compliance and ethics. We will continue to work closely with the authorities to ensure that they have all the information they need, and we are confident that this matter will be resolved in a timely and satisfactory manner,’’ the spokesperson said while adding that ``it is business as usual at Byju’s’’.
“We are committed to delivering high-quality educational products and services to our customers across India and the world,” the spokesperson said.
Byju’s co-founded by Byju Raveendran and his wife Divya Gokulnath is India’s most valued start-up at $22 billion after its last fundraise in October 2022.
The edtech firm has been facing challenges after the withdrawal of the lockdown.
While its audited statements for the fiscal 2020-21 were delayed by 18 months, results for the year ended March 31, 2022 are yet to be announced.
The company has reportedly offered to increase the rate of interest on its $1.2 billion term loan B as part of renegotiating its debt-financing arrangements.
In October, it announced it will retrench 2,500 employees and hire 10,000 teachers over six months to rationalise cost.
Byju’s showed a loss of Rs 4,588 crore for 2020-21 — 19 times more than that of Rs 231.69 crore in 2019-20. Revenues during the financial year 2020-21 dropped to Rs 2,428 crore from Rs 2,511 crore in 2019-20.