The Enforcement Directorate issued a foreign exchange violation show cause notice of over Rs 9,300 crore against edtech major BYJU’s and its CEO and co-founder Raveendran Bjyu. The federal probe agency cited multiple grounds for charging the company and its chief promoter, including charges of failing to submit documents of imports against advance remittances made outside India and failing to realize proceeds of exports made outside India by delayed filing of documents against the Foreign Direct Investment (FDI) received into the company.
In a statement, the Enforcement Directorate said that a show cause notice has been issued to BYJU’s registered company, Think & Learn Private Limited, and CEO Raveendran with respect to the contraventions of the provisions of the Foreign Exchange Management Act (FEMA) to the tune of Rs 9,362.35 crore. Post final adjudication, the ED has the power to penalize FEMA violators up to three times the value of the amount mentioned in the show cause notice.
The agency mentioned that statements of Raveendran and BYJU’s chief financial officer were recorded after searches were carried out at three premises, including at Raveendran’s house, in Bengaluru in April. The action was taken after complaints were received regarding the foreign investment received by Think & Learn Private Limited and the business conduct of the company.
The company was accused of making significant foreign remittances outside India and investments abroad, allegedly in contravention of provisions of FEMA, 1999, causing a loss of revenue to the government of India, according to the ED.
After the April searches, the ED stated that the company had not prepared its financial statements since the 2020-21 fiscal and had not gotten the accounts audited, which is mandatory. The searches found that the company received foreign direct investment (FDI) of about Rs 28,000 crore during the period from 2011 to 2023.
The company also remitted about Rs 9,754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment. The company allegedly booked around Rs 944 crore in the name of advertisement and marketing expenses, including the amount remitted to foreign jurisdictions, according to the ED.
BYJU’s co-founder Raveendran Bjyu and his wife Divya Gokulnath co-founded the e-learning company and provide early learning, middle school education, and test preparation services, among others. Earlier this month, the company reported a narrowing of operational losses in the core business to Rs 2,253 crore for the 2021-22 fiscal year.
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