ED has conducted searches and seizure action at three premises, two offices and one residential
FEMA searches revealed BYJU’S had received FDI to the tune of INR 28,000 Cr between 2011 and 2023
The investigation against the edtech giant was initiated based on various complaints received from various private persons, ED said
Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
The Enforcement Directorate, on Saturday (April 29), said that it conducted search and seizure operations at premises linked to edtech giant BYJU’S.
“Directorate of Enforcement (ED) has conducted searches and seizure action at 3 premises (2 Business and 1 residential) in Bengaluru in the case of Raveendaran Byju and his company ‘Think & Learn Private Limited’ under the provisions of Foreign Exchange Management Act (FEMA),” ED said in a statement.
FEMA searches also revealed that the edtech startup had received foreign direct investment to the tune of INR 28,000 Cr during the period from 2011 to 2023.
Further, ED’s note added that the company has also remitted INR 9,754 Cr to various foreign jurisdictions in the name of overseas direct investment during the same period.
Moreover, the edtech giant has booked around INR 944 Cr for advertisement and marketing expenses, including the amount remitted to foreign jurisdictions.
“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,” ED said.
It is to be noted that BYJU’S released its FY21 statements in September 2022, after an 18-month delay and is yet to file the results for the year ended March 31, 2022.
According to ED’s note, the investigation against the edtech giant was initiated based on various complaints received from various private persons. It also claimed that several summonses were issued to the founder and CEO, Raveendaran Byju, during the investigation.
“However, he always remained evasive and never appeared during the investigation,” it stated.
The recent visit by officials from the Enforcement Directorate (ED) in Bangalore was related to a routine inquiry under FEMA.
BYJU’s in a statement 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. We remain focused on our mission to transform the way students learn and prepare for their future,” it added.
The raids comes at a time when the company is already under pressure as the lenders who 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).
Meanwhile, BYJU’S is also in talks to raise $600 Mn – $700 Mn via a mix of equity and convertible notes, with some new investors. A large chunk of the funding round is said to be through equity funding at a flat valuation of $22 Bn.
Since its launch, BYJU’S has raised close to $5.8 Bn from the likes of General Atlantic, Prosus Ventures, Sequoia Capital India, among others. The company had last raised $250 in October 2022 at $22 Bn valuation.
According to its FY21 financial results, the edtech decacorn had revenue of INR 2,280 Cr, and losses to the tune of INR 4,588 Cr.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.