Byju’s, one of the leading ed-tech companies in the country, has been sent a show-cause notice by the Enforcement Directorate for an alleged Rs 9,362.35 crore violation under the Foreign Exchange Management Act (FEMA). Issuing a press statement late on Tuesday evening, the ED stated, “adjudicating authority had issued show cause notices to Think & Learn Private Limited and Byju Raveendran for violation involving an amount of Rs. 9362.35 crore under FEMA, 1999”.
The noose was getting tighter around Byju’s as the Enforcement Directorate in June initiated the procedures for the company’s international funds analysis, especially its funds coming from West Asian countries. The directorate is still in touch with the global intelligence sharing agencies to track the alleged violation in Byju’s offshore funding process, highly placed sources in the ED said.
A senior officer from the agency said that the investigation is now at a critical stage, and it has revealed that the company is into more than one FEMA (Foreign Exchange Management Act) violation. A global agency has already been hired for the financial intelligence sharing and the analysis of Byju’s offshore funding process.
The banks and investors were contacted by the investigators and necessary details are being gathered, added the senior officer.
LOC, 7 summonses
It took a look out circular (LOC), meant for intimation while going abroad, at least seven summonses issued by the Enforcement Directorate since 2020, and multiple raids conducted at his office and related premises in April this year, for Byju Raveendran, the founder CEO of one of India’s most successful ed-tech companies, to appear before the agency once, News18 has learnt.
Apart from this one particular occasion following the raids, he was represented by his lawyers, though the directorate specifically asked him to appear. Since he was evading the summonses, the ED issued an LOC to be on the safer side of the law.
According to sources in the agency, the LOC was renewed until he appeared before the investigators after the raids this year. In June, he addressed his employees through email and explained certain crucial issues related to the company, barring the matter connected to the probe and the consequent raids.
Even though Raveendran is currently abroad, he is complying with legal needs, cooperating with the investigation, responding to the communication or enquiries, and other requirements the ED has, said another senior officer of the agency.
9 FIRs in 3 years
A total of nine FIRs— some of which were registered in Kochi and some in Bengaluru— were also filed in the past three years.
It’s been five months since the ED raided the office and other premises of Byju’s following multiple complaints filed by its clients and customers, and while some were related to the company’s international sponsorships and other affiliated organisations, the investigation into the alleged FEMA violation, the scope of parking funds in foreign territory, and other audit-related issues is still on. Thousands of documents from the banks, its offices, and other premises have been seized and they are under examination.
Apart from the complaints related to FDI, remittances, and FEMA regulations, parents of some children who signed up with Byju’s for coaching, alleged that the company took loans from financiers or financing companies on high interests without proper consent from the families. Their documents were allegedly used without their knowledge. About Byju’s audits and other annual numbers, ED officers say that the Ministry of Corporate Affairs (MCA) may take up the issues after the directorate is done with the investigation.