Enforcement Directorate raided the premises of Raveendran Byju, CEO of Bengaluru-based edtech startup unicorn BYJU’s. The searches were carried out for allegedly violating laws governing foreign funding. The investigation agency searched two business premises and one residential property in Bengaluru in connection with a case against Mr Raveendran, and his company Think & Learn Private Limited under the provisions Foreign Exchange Management Act (FEMA).
ED claimed that several incriminating documents and data were seized during the searches.
Reacting quickly to the claims made by ED, BYJU’s tried to play down the whole matter by claiming that the searches were part of a “routine enquiry” under FEMA.
“We are completely transparent and have given all the requested information to the authorities. We are confident in our integrity and committed to maintaining the highest standards of ethics and compliance,” the company said.
However, the agency seems to be in no mood to go easy on the matter and released a press note revelating that the company received an estimated Rs 28,000 crore (Approx $3.4 billion as per today’s rate) in foreign direct investments between 2011 and 2023.
It added that the company also sent approximately Rs 9,754 crores (US$1.22 billion) to foreign entities under the overseas direct investment scheme during the same time period.
ED clarified that the crackdown on Ravenndran resulted from his repeated attempts to escape from the enquiry. Raveendran Bjyu had been summoned “several times” in the past, but he remained evasive and never appeared before it, as per the claim made by ED.
The company – Think & Learn Private Limited aka Byju’s – has booked a whopping Rs 944 crore (US$ 120 million approx) under “Advertising and Marketing expenses”, including the amount sent to foreign jurisdictions. Such advertising expenses by a startup are unheard of, and that’s why ED wants to cross-verify the authenticity of the numbers provided by the firm.
It’s also worth noting that Byju’s has still not prepared its financial statements for fiscal 2020-21 and has failed to comply with the mandatory requirement of getting its accounts audited.
