BYJU claims no fraud, as ED raids its premises over FEMA breach

The searches found that the company received foreign direct investment (FDI) to the tune of ₹28,000 crore during 2011-2023

Byju's layoff

New Delhi: The Enforcement Directorate (ED) on Saturday conducted search in office and residential premises of Edutech major BYJU’s chief executive officer and co-founder Raveendran Byju in Bengaluru. The investigating agency is said to have seized incriminating documents and digital data as part of the prove relating to foreign exchange management act (FEMA) violation.

Officials said that a total of three premises, two business and one residential, including that of the registered company-Think & Learn Pvt Ltd-were raided under the provisions of the FEMA. The federal financial investigation agency said in a statement it has seized various “incriminating documents and digital data.”

The BJYU’s legal team officials 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.

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The ED alleged the company (Think & Learn Pt Ltd) has not prepared its financial statements since 2020-21 fiscal and has not got the accounts audited, which is mandatory. Hence, the genuineness of the figures provided by the company are being cross-examined from the banks, it said.

The searches found that the company received foreign direct investment (FDI) to the tune of ₹28,000 crore during 2011-2023. “The company also remitted about ₹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 ₹944 crore in the name of advertisement and marketing expenses including the amount remitted to foreign jurisdiction,” said an ED officer.

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The spokesperson for BYJU’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.”

BYJU’s statement said: “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.”

The Bengaluru-based company, co-founded by Raveendran 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 retrenchment of 2,500 employees and hire 10,000 teachers over six months to rationalise cost.

Byju’s showed a loss of ₹4,588 crore for 2020-21, 19 times more than that of ₹231.69 crore in 2019-20. Revenues during the financial year 2020-21 dropped to ₹2,428 crore from ₹2,511 crore in FY20. The company is yet to release a financial performance report for FY22.

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