ED Seizes Edtech Startup Odaclass Parent’s INR 8.26 Cr In FEMA Violation Case

The Enforcement Directorate (ED) on Friday (May 19) said it seized INR 8.26 Cr in the case of Pigeon Education Technology India Private Limited, which operates Bengaluru-based edtech startup Odaclass, under the Foreign Exchange Management Act (FEMA) Act.

This comes days after the ED said it conducted search and seizure action at the startup. The law enforcement agency then claimed that the company was fully-owned by Chinese nationals and all the affairs of the company, including financial decisions, were being taken by persons sitting in China.

During its investigation, the ED said it found that the company siphoned off INR 82.72 Cr to China and Hong Kong in the name of advertisement and marketing expenses on the instructions of Chinese director Liu Can.

“The company could not produce any proof of receipt of service on its part and proof of any advertisement published against the said expenses. Further, the director and accounts manager of the company has also admitted during investigation that the payments were made only on the instructions of Chinese director Liu Kan,” the ED said in a statement.

Pigeon Education Technology could not be reached for a comment on the issue.

The ED said that Vedanta Hamirwasia, the Indian director of the company, told the agency that the Chinese director told him that the said advertisements were published through Google and Facebook. However, no confirmation or invoice raised by these platforms was submitted to the agency.

Several other Chinese entities operating in the country have also come under the radar of the investigative agency. Earlier in March, the ED provisionally attached INR 106 Cr worth of movable assets belonging to several loan app operators with connections to Chinese entities and nationals.