ED Issues Show Cause Notice To BYJU’S For INR 9,000 Cr FEMA Violation, Edtech Denies

In another trouble for embattled edtech giant BYJU’S, the Enforcement Directorate (ED) has reportedly found it to allegedly have violated Foreign Exchange Management Act (FEMA) rules for an amount of over INR 9,000 Cr.

The probe agency has sent a show cause notice to BYJU’S, as per media reports.

However, the edtech giant vehemently rejected the reports. In a statement, the company said, “BYJU’S unequivocally denies media reports that insinuate it has received a (any) notice from the Enforcement Department. The company has not received any such communication from the Enforcement Department.”

Earlier this year, the ED conducted search and seizure operations at premises linked to the edtech giant.

The development adds to the woes of BYJU’S, which has been in the news for all the wrong reasons over the past year. After missing multiple deadlines for filing its financial statements for the financial year 2021-22 (FY22), BYJU’S, earlier this month, released some select numbers.

Excluding its acquired businesses, BYJU’S reported a standalone EBITDA loss of INR 2,253 Cr in FY22 as against an EBITDA loss of INR 2,406 Cr in FY21. The entity’s total income stood at INR 3,569 Cr in FY22 as against INR 1,552 Cr in FY21. However, there is no clarity on the release of consolidated financial numbers for FY22.

The prolonged delay in releasing its FY22 financial statements also resulted in the exit of half of BYJU’S board members. Earlier this year, its statutory auditor Deloitte also resigned citing the delay in releasing the financial statements. 

Last month, BYJU’S elevated Nitin Golani as India CFO after Ajay Goel also stepped down within six months of joining the company.

In between all these, BYJU’S was also involved in a confrontation with its lenders over the repayment of its $1.2 Bn Term Loan B. The company is reportedly also looking to sell Epic and Great Learning, the companies it acquired during the pandemic-driven edtech boom, to repay the loan.

BYJU’S has also begun the restructuring exercise to lay off over 4,000 employees to cut costs.

Amid all these chaos, the only respite that the edtech giant has received is Ranjan Pai, the chairman of Manipal Group, acquiring debt worth $250 Mn availed by the edtech giant’s offline coaching arm Aakash Educational Services Limited (AESL) from Davidson Kempner.