ED sends show cause notices to Think & Learn, Byju Raveendran for FEMA violation

The ED's statement, which notes contraventions to FEMA totalling Rs 9,362 crore, comes just hours after reports surfaced alleging forex violations by BYJU'S.

ED sends show cause notices to Think & Learn, Byju Raveendran for FEMA violation

Tuesday November 21, 2023,

3 min Read

The Enforcement Directorate (ED) on Tuesday issued show cause notices to Think & Learn Private Limited—the parent company of BYJU'S—and Founder and Chief Executive Officer Byju Raveendran for violating the Foreign Exchange Management Act (FEMA) at the conclusion of its investigation.

The Adjudicating Authority under FEMA issued notices for “contraventions of the provisions of FEMA, 1999 amounting to Rs 9362.35 crore,” the ED noted in a statement. This comes just hours after reports surfaced alleging forex violations by the troubled edtech company.

The agency's statement highlighted that, upon concluding the investigation, it was determined that BYJU’S parent company and Raveendran “have contravened the provisions of FEMA by failing to submit documents of imports against advance remittances made outside India, by failing to realise proceeds of exports made outside India, by delayed filing of documents against the Foreign Direct Investment (FDI) received into the company, by failing to file documents against the remittances made by the company outside India and by failing to allot shares against FDI received into the company.”

BYJU'S declined to comment on the ED's statement.

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The ED stated that it initiated an investigation based on multiple complaints concerning the foreign investment received by Think & Learn Private Limited and the business conduct of the company.

The agency added, “The company was also stated to have made significant foreign remittances outside India and investments abroad which were allegedly in contravention of provisions of FEMA, 1999 and caused loss of revenue to the Government of India.”

Building on the provided details, in April, the ED conducted searches at three Bengaluru locations linked to BYJU’S, targeting suspected violations of foreign exchange laws. 

During the searches, the agency seized documents on all investments and overseas transactions of the edtech company. The statements from Raveendran and the Chief Financial Officer of Think and Learn Private Limited were also documented, the ED noted.

The Bengaluru-based edtech company reportedly secured almost Rs 28,000 crore in FDI from 2011 to 2023, the agency said. Additionally, it was noted that the edtech firm transferred Rs 9,754 crore to different foreign jurisdictions in the form of overseas direct investments over the same period. The company allocated Rs 944 crore for advertising and marketing, including funds remitted abroad, the ED had said.

The ED has been examining BYJU’S' compliance with the FEMA since 2011. Concurrently, the edtech firm has come under scrutiny from both the Ministry of Corporate Affairs and the Directorate General of GST Intelligence.

Earlier today, Raveendran assured shareholders in a note that the edtech company is in adherence to FEMA guidelines amid allegations of forex violations.

“We want to assure you that BYJU’S has always been fully compliant with FEMA regulations,” Raveendran said in a note to shareholders. YourStory has seen a copy of the note.

BYJU’S chief added that “one of India’s largest” law firms had conducted due diligence on it, and “found no FEMA violations” at the edtech company.

Edited by Kanishk Singh