ED raids BYJU'S CEO Byju Raveendran, says he skipped several FEMA summons
ED has seized "incriminating documents and digital data" as part of a foreign exchange violation probe.
Saturday April 29, 2023,
3 min Read
The Enforcement Directorate on Saturday, April 29, said it has searched the Bengaluru-based office and residential premises of edtech major, and its CEO and Co-founder Byju Raveendran. ED has seized "incriminating documents and digital data" as part of a foreign exchange violation probe.
A total of three premises—two business and one residential, including that of the registered company Think and Learn Pvt Ltd—were raided under the provisions of the Foreign Exchange Management Act (FEMA).
A spokesperson for BJYU'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."
The ED alleged the company (Think and Learn Pvt Ltd) has not prepared its financial statements since the 2020-21 fiscal, and has not got the accounts audited, which is mandatory. Hence, the genuineness of the figures provided by the company is being cross-examined from the banks, it said.
It said the action was taken on the basis of "various complaints" received by private people and alleged Raveendran Byju was issued "several" summons but he remained "evasive and never appeared" before the ED.
The searches found that the company received foreign direct investment (FDI) to the tune of Rs 28,000 crore during 2011-2023. "The company also remitted about Rs 9,754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment," the agency said. "The company has booked around Rs 944 crore in the name of advertisement and marketing expenses including the amount remitted to foreign jurisdiction."
The spokesperson for BJYU'S added, "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 company said it wants to "emphasise 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. We remain focused on our mission to transform the way students learn and prepare for their future," it added.
The Bengaluru-based company, co-founded by Byju and his wife Divya Gokulnath, provides early learning, middle school education and test preparation. It was valued at $22 billion in a funding round in March 2022.
In October, it announced it will retrench 2,500 employees and hire 10,000 teachers over six months to rationalise costs.
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 FY20.
The company is yet to release a financial performance report for FY22.
Edited by Kanishk Singh