ED Alleges BYJU's Of FEMA Violations worth Rs 9,000 crore

The Enforcement Directorate has alleged Foreign Exchange Management Act (FEMA) violation by Bengaluru-based edtech major BYJU'S parent, Think & Learn Pvt Ltd., to the tune of Rs 9,000 crore, according to media reports. After multiple reports which said the ED sent a show cause notice to BYJU'S, the company has issued a clarification saying  has also clarified that 

In April 2023, the ED conducted raids at several premises linked to BYJU'S. However, in May, news agency IANS reported that the ED did not find any FEMA violation by the edtech company.

The company, which was once India's most-valued startup at $22 billion, has been in the spotlight for multiple reasons. While the company is struggling to maintain its reputation domestically, a US court ruled in favour of BYJU'S lenders his month allowing them to take control of its unit Alpha after a loan default.

In April when ED conducted raids at BYJU'S the agency had alleged that the company received foreign direct investment to the tune of Rs 28,000 crore between 2011 and 2023. Further, the company has also remitted Rs 9754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment, according to ED.

BYJU'S booked around Rs 944 crore in the name of advertisement and marketing expenses, including the amount remitted to foreign jurisdictions, the agency said. ED also added that BYJU'S has not prepared its financial statements since the financial year 2020-21 and has not had the accounts audited which is mandatory.

Earlier this month, BYJU'S reported its financial results for the FY 2020-21, attributing the delay to governance issues and the resignation of its auditor. The operating losses for BYJU'S parent company, Think & Learn, reduced by 6 per cent to Rs 2,400 crore for its primary online education segment. In contrast, the revenue more than doubled to Rs 3,550 crore for the fiscal year ending on March 31, 2022.

It was also reported that Ranjan Pai, Chairman of Manipal Education and Medical Group, successfully acquired a debt of Rs 1,400 crore owed by BYJU's to Davidson Kempner. "The family office of Ranjan Pai has taken over the debt exposure of Davidson Kempner in Aakash Education Services Ltd (AESL), as he partners with primary shareholder BYJU's and its founder Byju Raveendran in steering the leading tutorial chain forward," news agency PTI reported quoting sources.