BYJU’S Staffer, Shah Rukh Khan Asked To Pay Compensation To IAS Aspirant

In a fresh trouble for BYJU’S, the District Consumer Disputes Redressal Commission in Indore reportedly asked a local manager of the edtech firm and actor Shah Rukh Khan, who was roped in as the brand ambassador in 2017, to return the fee paid by a IAS aspirant and pay her compensation.

In an order passed on Wednesday (April 26), the Commission asked to return the fee of INR 1.08 Lakh paid by the student Priyanka Dixit, along with 12% interest, news agency PTI reported. Besides, it also directed the employee and Khan to pay her INR 5,000 as litigation cost and INR 50,000 as compensation for financial and mental agony.

The local manager of BYJU’S and the actor have been directed to pay the amount “jointly or severally” to Dixit.

“The woman complainant was encouraged to take admission in BYJU’S coaching (course) by placing false and misleading online advertisements on behalf of the opposition parties. No coaching facility was provided after receiving the fee and despite assurance of refund of the amount, the fee was not refunded, which in itself is fraudulent behaviour and shows unfair trade practice,” the Commission’s order said.

Dixit said she enrolled for the course after being influenced by BYJU’S advertisement and alleged that the firm assured her of providing coaching by ‘good teachers’. She was also told that the classes would start from January 14, 2021. However, this did not happen, following which the IAS aspirant asked BYJU’S to return her fees and cancel her admission on January 27, 2021. But, BYJU’s did not refund the fees despite repeated requests, she alleged.

Under the Consumer Protection Act, a person can file a complaint against a brand for issues with services as well as against those who advertise it. Hence, the complaint was filed against BYJU’S as well as Khan, who was featured in the advertisements of the company.

BYJU’S is known for its aggressive marketing and sales tactics to increase its user base and grow at a rapid pace. However, this has also landed the edtech unicorn in trouble in the past. Last year, the National Commission for Protection of Child Rights (NCPCR) summoned BYJU’S’ CEO Byju Raveendran for indulging in malpractices to lure parents to buy their courses for their children.

Amid the allegations, BYJU’S launched a four-tier tech-driven internal sales (inside sales) process earlier this year to replace its direct sales process.

It must be noted that the edtech platform spent INR 2,250.9 Cr for business promotion expenses in FY21, almost a 150% jump from INR 899.3 Cr it spent in FY20.

Meanwhile, the Enforcement Directorate (ED) on Saturday (April 29) said it conducted search and seizure operations at premises linked to BYJU’S. The investigation against the edtech giant was initiated based on complaints received from various private persons, the ED said.

The development comes at a time when the company is already under pressure as its lenders have sought a prepayment of $200 Mn, along with a higher interest rate, as a precondition to restructure its $1.2 Bn Term Loan B (TLB).

BYJU’S has raised close to $5.8 Bn till date from the likes of General Atlantic, Prosus Ventures, Sequoia Capital India, among others. The company last raised $250 Mn in October 2022 at a valuation of $22 Bn.

The edtech decacorn saw a 19.8% increase in its net loss to INR 4,588 Cr in FY22, while its revenue stood at INR 2,280 Cr during the year. BYJU’S is yet to file its financial statements for FY22.