Troubles continue for edtech giant Byju's as the Enforcement Directorate (ED) uncovers alleged forex violations amounting to Rs 9,000 crore. The revelation comes in the wake of intensive search-and-seizure operations conducted by the probe agency at three premises in Bengaluru. The case, which revolves around founder and CEO Byju Raveendaran and his company 'Think & Learn Private Limited,' is being investigated under the provisions of the Foreign Exchange Management Act (FEMA).
The ED's findings suggest significant lapses in adherence to forex regulations by Byju's, raising concerns about potential violations that amount to a substantial sum. The alleged violations are likely to intensify the challenges facing the edtech company, which has been a prominent player in the Indian education technology sector.
Byju's has firmly refuted recent media reports suggesting its involvement in violations under the Foreign Exchange Management Act (FEMA). In a statement, the company explicitly rejected any insinuations of FEMA violations and clarified that it has not been formally contacted by any authorities regarding such matters.
The investigative agency conducting the search-and-seizure operation asserted that it uncovered compelling documents and digital data. During the operation, it was revealed that Byju's had attracted foreign direct investment (FDI) amounting to around Rs 28,000 crore spanning from 2011 to 2023.
According to officials from the Enforcement Directorate (ED), Byju's reportedly transferred approximately Rs 9,754 crore to various foreign destinations in the guise of overseas direct investment during the same timeframe. The investigative agency also disclosed that the company accounted for about Rs 944 crore in advertising and marketing expenses, encompassing the funds sent to foreign jurisdictions.
Officials from the Enforcement Directorate (ED) have alleged that Byju's has not prepared financial statements since the fiscal year 2020-21 and has neglected to undergo the necessary auditing of its accounts. In light of these findings, the investigative agency is casting doubt on the authenticity of the company's provided financial figures, which are currently under scrutiny by banks.
The probe into the platform stems from various complaints filed by private individuals. Throughout the ED's investigation, numerous summons were issued to Byju Raveendran. However, he did not make an appearance during the investigative proceedings.
Image source: Hindustan Times