ED searches BYJU's premises under FEMA, seizes documents and data

The Directorate of Enforcement (ED) has conducted searches and seizure action under the provisions of the Foreign Exchange Management Act (FEMA) at 3 premises related to Byju Raveendran, CEO and founder of BYJU's, and his ed-tech company.

The searches were made at 2 business locations and 1 residential location in Bengaluru. ED reported that during the search and seizure action, various incriminating documents and digital data were seized.

Business Today reached out to BYJU's for a comment on the same. The company's spokesperson said, "The recent visit by officials from the Enforcement Directorate (ED) in Bangalore was related to a routine inquiry under FEMA. We have been completely transparent with the authorities and have provided them with all the information they have requested."

The ED noted in its release that the company has received foreign direct investment to the tune of Rs 28,000 crore during the period from 2011 to 2023. The company has also remitted Rs 9754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment.

On this, the company spokesperson said, "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." 

Furthermore, ED revealed that the company has booked around Rs.944 crore in the name of 'Advertisement and Marketing expenses' including the amount remitted to a foreign jurisdiction.

It is worth noting that the company has not prepared its financial statements since the financial year 2020-21 and has not got the accounts, audited which is mandatory as per regulations. 

The ED also announced in a release on Saturday that investigation against the platform and its promoters was initiated on the basis of "various complaints received from various private persons."

The agency further said that during the course of the investigation, several summonses were issued to the founder and CEO Byju Raveendran, however, he remained evasive and never appeared during the investigation. 

Further investigation in the matter is under progress, ED highlighted. 

As per the financial statements of FY21, the ed-tech major reported a loss of Rs 4,589 crore, the largest-ever reported by an Indian startup. The company's revenues had fallen 3.3 per cent. Interestingly, the FY21 financials of the company were delayed by almost 18 months, much to the annoyance of the Corporate Affairs Ministry.