Edtech startup Byju’s has been making headlines for a while due to notices issued by the Enforcement Directorate (ED) regarding Foreign Exchange Management Act (FEMA) violations. Now, the company has issued a statement regarding the notices. On Wednesday, Byju’s clarified the matter, acknowledging the ED notice but attributing it to technical reasons. In its official statement, the company stated that Byju’s has not violated any Foreign Exchange rules, and the ED notice pertains only to technical issues, including the delay in submitting annual reports.
It’s worth noting that Think and Learn Private Limited, the parent company of Byju’s, and its founder Byju Raveendran received a notice from the ED on November 21, 2023, concerning violations of FEMA rules related to foreign investments. The information was conveyed through an ED notification. Byju’s, in its statement, also mentioned that the ED notice does not mention any penalty. If any penalty is imposed on the company in this case, it could be relatively minor, up to INR 7,500.
The company faces several serious allegations, as per media reports. Byju’s reportedly did not adhere to the rules of foreign exchange while investing money abroad, causing a loss of tax revenue to the government. Additionally, the company allegedly did not submit several essential documents while investing money abroad. By doing so, the company has clearly violated the rules of Foreign Direct Investment (FDI), leading to the ED issuing a notice for INR 9,362.35 crore in one case.
In May of the same year, the ED conducted raids at several locations associated with Byju’s. During these raids, the ED seized the company’s digital data and many essential documents. The ED revealed that the company had not submitted documents related to funds sent abroad during the raids. The company was also accused of concealing foreign income.
This information provides insights into the regulatory challenges and legal issues faced by Byju’s, a prominent player in the edtech sector, and highlights the importance of compliance with financial regulations.