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ED Conducts Searches At Byju’s Firm In Connection With Alleged Violation Of Foreign Exchange

On April 29, the Enforcement Directorate (ED) searched locations connected to the edtech company Byju’s in Bengaluru. The searches were conducted in relation to alleged foreign exchange crimes by the company under investigation by the agency.

Since 2011, Byju’s has allegedly sent about Rs 9,700 crore abroad of the Rs 28,000 crore in FDI it has received. Suspected irregularities in this transaction are being looked into.

According to Buju’s, the searches are a “routine inquiry” and the company is working with the authorities.

The agency claims that searches have been done at three locations in Bengaluru, including CEO Raveendran Byju’s home and the headquarters of Byju’s parent business, Think & Learn Private Limited.

In the matter of Raveendaran Byju and his business, “Think & Learn Private Limited” (Byju online learning platform), the ED has carried out searches at three Bengaluru locations. Various incriminating documents and digital data were found during the search, the agency reported in a tweet.

“Searches under the Foreign Exchange Management Act (FEMA) also showed that the company got approximately Rs 28,000 crore in foreign direct investment from 2011 to 2023. Additionally, the company transferred approximately Rs 9,754 crore (approx) in the name of overseas direct investment to various foreign jurisdictions during the same period, according to a statement from the ED.

The sum sent to a foreign jurisdiction is included in the approximately Rs 944 crore in advertising and marketing expenses that the corporation has recorded. Since the financial year 2020–2021, the company has not prepared its financial statements and has not had the accounts audited, which is required. Therefore, the banks are cross-examining the accuracy of the figures provided by the company,” the statement added.

According to the agency, the inquiry into the site was started as a result of several complaints it received from numerous private individuals. “The creator and CEO Raveendran Byju was issued multiple summonses during the ED probe, but he always remained evasive and never showed up during the investigation. Additional investigation is being conducted, according to the ED statement.

A Byju’s spokeswoman described the ED raids as a “routine” investigation under FEMA in a statement in response to the searches. “We have cooperated fully with the authorities and given them all the information they have asked for. The statement read, “We are committed to keeping the highest levels of compliance and ethics. We have nothing but the utmost trust in the integrity of our operations.

One of the largest startups in India, Byju’s has attracted major international investors over the years, including General Atlantic, Sequoia Capital, and BlackRock.

The company entered the Indian market with high hopes, but has not yet reported a profit. After letting go of 2,500 staff the year before, it laid off approximately 1,000 people earlier this year.

In contrast to the loss of Rs 231.69 crore it reported in 2019–20, Byju’s declared a loss of Rs 4,588 crore in 2020–21, a 19-fold increase. Revenues decreased to Rs 2,428 crore for the financial year (FY) 2020–21 from Rs 2,511 crore in FY20. A report on the company’s financial performance for FY22 has not yet been made public.

In response to a complaint from a woman who registered for coaching to become an Indian Administrative Service (IAS) officer, the District Consumer Disputes Redressal Commission in Indore, Madhya Pradesh, issued an order on April 26 against a Byju employee and actor Shah Rukh Khan for alleged “fraudulent behaviour” and “unfair trade practise.”

Priyanka Dixit, the complainant, paid a fee of Rs. 1.08 lakh at the time of admission in 2021. According to the commission’s order, this fee must be refunded, along with 12% annual interest, and she must also receive Rs. 5,000 in litigation costs and Rs. 50,000 in damages for her physical and emotional suffering. According to the commission, actor Khan and the local manager of Byju’s must “jointly or severally” pay Dixit the sum.

“Unilateral action was taken against the respondents (Byju’s management and actor Shah Rukh Khan),” the commission stated in the judgement. “Since the respondents (Byju’s manager and actor Shah Rukh Khan) remained absent even after notices in the matter were served and no reply was submitted on their behalf. Dixit had asserted that a commercial with Khan had persuaded her to join Byju’s.

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