ED raid on edutech unicorn Byju’s in Bengaluru under ‘FEMA violations’

The ED raided two business premises linked to the company and one residential property linked to Byju’s founder Raveendran Byju in Bengaluru under provisions of Foreign Exchange Management Act (FEMA)

Updated - April 29, 2023 04:03 pm IST

Published - April 29, 2023 01:23 pm IST - Bengaluru

A file photo of Byju’s founder Raveendran Byju. The ED raided two business premises linked to the company and one residential property linked to Raveendran Byju in Bengaluru, on April 29, 2023.

A file photo of Byju’s founder Raveendran Byju. The ED raided two business premises linked to the company and one residential property linked to Raveendran Byju in Bengaluru, on April 29, 2023. | Photo Credit: The Hindu photo library

The Directorate of Enforcement (ED) searched the premises of Think & Learn Private Limited, which runs the online private education portal Byju’s, in Bengaluru on April 29.

The ED raided two business premises linked to the company and one residential property linked to Byju’s founder Raveendran Byju in Bengaluru under provisions of Foreign Exchange Management Act (FEMA).

A statement by the ED revealed that ₹28,000 crore of Foreign Direct Investment (FDI) into the company, and ₹9,754 crore overseas direct investment by the company are under the scanner.

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According to the ED statement: The search revealed that the company received Foreign Direct Investment (FDI) of ₹28,000 crore from 2011 to 2023. Further, the company has remitted ₹9,754 crore to various foreign jurisdictions during the same period, in the name of overseas direct investment. The company has booked around ₹944 crore as advertisement and marketing expenses, which included amounts remitted to foreign jurisdictions. The company has not prepared its financial statements since the financial year 2020-21 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. 

The investigation against the platform was initiated on the basis of complaints from various individuals. Though the ED has summoned the company’s founder and CEO Raveendran Byju multiple times, ‘he always remained evasive and never appeared during the investigation’.

The recent visit by officials from the Enforcement Directorate (ED) in Bengaluru was related to a routine inquiry under FEMA, according to the agency. 

Responding to the raid, Byju’s legal team said that they had been completely transparent with the authorities and had provided all the information they requested. According to a statement by the company: “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.” 

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