This is an archive article published on April 29, 2023

ED raids Byju’s premises, cites FEMA violations; routine probe, says firm

In a tweet, the ED said that a total of three premises of Byju's CEO Raveendran were raided recently and various incriminating documents and digital data were seized.

BYJU CEO Raveeendran (File)

4 min readBengaluruApr 30, 2023 12:36 AM IST First published on: Apr 29, 2023 at 11:51 AM IST

THE ENFORCEMENT Directorate (ED) on Saturday said it carried out searches at three premises linked to EdTech firm Byju’s in Bengaluru in connection with its probe into alleged foreign exchange violations.

Byju’s said the searches were part of a “routine inquiry”. It said it has been “completely transparent with the authorities” and would “continue to work closely” with them.

From the archives | Byju’s working hard to achieve group-level profitability in a few months, says co-founder

In a statement, the ED said it recovered “various incriminating documents and digital data” during its 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,” it said.

“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 ED statement said.

The premises searched included the residence of company CEO Byju Raveendran and the office premises of Think & Learn Private Limited, the parent company of Byju’s.

ED has conducted searches at 3 premises in Bengaluru in the case of Raveendaran Byju and his company ‘Think & Learn Private Limited’ (Byju online learning platform) under the provisions of FEMA. During the search, various incriminating documents and digital data was seized.

— ED (@dir_ed) April 29, 2023

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

In a statement, Byju’s said: “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. 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 emphasise 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 said.

Byju’s, last valued at $22 billion, is India’s most valued start-up. According to a Credit Suisse Research Institute report from last month, the EdTech firm was the 12th most valuable start-up globally at the end of 2022. Recently, Byju’s held talks with investors including private equity major TPG to raise over $500 million as it seeks to stave off potential debt issues.

In October 2022, the firm fired 5 per cent of its workforce after it cut hundreds of jobs amid a global funding winter that impacted companies across sectors, setting back plans to go public last year. The firm had framed the layoffs as a way to improve its finances and achieve profitability.

Its FY’21 results, which the firm filed following an 18-month delay, had shown that Byju’s lost over Rs 12 crore daily. It posted a revenue of Rs 2,428 crore as its losses in the fiscal rose 17-fold to over Rs 4,500 crore, the highest ever posted by an Indian start-up.