Byju's CEO Raveendran's Bengaluru Home and Office Raided by ED for FEMA Violations

The Enforcement Directorate (ED) has carried out searches on premises linked to EdTech firm Byju’s in Bengaluru in connection with alleged foreign exchange violations that the agency is probing against the company. The firm has allegedly remitted abroad over Rs 9,700 crore of the Rs 28,000 crore it received as Foreign Direct Investment (FDI) since 2011 and suspected irregularities in the same are being probed.

BYJU CEO Raveeendran

BYJU’s said the searches were part of a “routine inquiry” and that it was cooperating with the agency.

According to the agency, the searches have been conducted at three premises in Bengaluru including the residence of company CEO Raveendran Byju and the office premises of Think & Learn Private Limited, the parent company of Byju’s.

The agency claimed to have recovered “various incriminating documents and digital data” during the searches. “FEMA (Foreign Exchange Management Act) searches also revealed that the company has received foreign direct investment to the tune of Rs 28,000 crore (approx.) during the period from 2011 to 2023. Further, the company has also remitted Rs 9,754 crore (approx.) to various foreign jurisdictions during the same period in the name of overseas direct investment,” the ED said in a statement.

“The company has booked around Rs 944 crore in the name of Advertisement and Marketing expenses including the amount remitted to foreign jurisdiction. The company has not prepared its financial statements since 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 statement added.

The investigation against the platform was initiated on the basis of various complaints received from various private persons, the agency has claimed. “During the investigation conducted by the ED, several summonses were issued to the founder & CEO Raveendran Byju, however, he always remained evasive and never appeared during the investigation. Further investigation is under progress,” the ED statement said.

In a statement reacting to the ED raids, a spokesperson for Byju’s termed it a “routine” inquiry under FEMA. “We have been completely transparent with the authorities and have provided them with all the information they have requested. 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,” the statement said.

“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. We want to emphasize 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,” it added.

Having entered the Indian market harboring great expectations, the company is yet to book profits. Recently, it also retrenched several employees. Byju’s booked a loss of Rs 4,588 crore in 2020-21, which is 19 times more than that of the Rs 231.69 crore figure it recorded in 2019-20. Revenues during the financial year (FY) 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.