No FEMA Violations Found So Far At BYJU’S After ED Searches

The Enforcement Directorate (ED) has not reportedly found any violations of the Foreign Exchange Management Act (FEMA) at the edtech giant BYJU’S so far in its investigations.

Per an IANS report citing sources, the documents collected by ED at BYJU’S premises in Bengaluru in late April are yet to indicate any FEMA violations. The people stated that while the investigation is still at an early stage, BYJU’S cooperated and provided ED with all necessary documents.

However, a company spokesperson declined to comment on the development in question.

The development comes as the edtech decacorn – one of India’s most valuable startups – came under the ED scanner for alleged FEMA violations.

ED visited three premises linked to BYJU’S and conducted a search and seizure operation on April 29. The search revealed that the edtech startup had received foreign direct investment to the tune of INR 28,000 Cr (around $3.4 Bn at current exchange rates) during the period from 2011 to 2023.

A BYJU’S spokesperson had said on the day of the visit that the ED visit was related to a routine inquiry under FEMA and there have been no violations under FEMA by the edtech decacorn.

“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,” the company spokesperson had said.

BYJU’S had added that it will continue to work with the authorities to ensure that they have all the information they need. “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,” the $22 Bn-valued edtech giant said.

To be sure, BYJU’S has so far raised $5.8 Bn in funding across multiple rounds and counts the likes of Sequoia Capital, Silver Lake, BlackRock, Prosus, General Atlantic, Tiger Global, and multiple sovereign and pension funds, among others.

It is still in talks with multiple investors to raise between $400 Mn and $600 Mn from Abu Dhabi-based 10X AD and Apollo Global.

Further, ED also stated that it recovered documents revealing a remittance to the tune of INR 9,754 Cr to various foreign jurisdictions under the pretext of overseas direct investment between 2011 and 2023.

The agency also noted that the edtech giant had set aside INR 944 Cr for advertising and marketing expenses, which also added some amounts remitted to foreign jurisdictions.

ED also pointed to the delayed filing of financial statements by BYJU’S since FY21, adding that it was cross-examining the figures provided by the company from the banks.

BYJU’S is yet to file financial statements for the year ended March 31, 2022.

The investigation into BYJU’S financial affairs comes as the company has been busy putting out fires over the best part of a year. From issues with its $1.2 Bn term loan B to thousands of employees being impacted by layoffs at group companies, the edtech giant has been making headlines consistently, for all the wrong reasons.