BYJU’s Faces ED Probe Over Alleged FEMA Violations
Vivek Prakash
Mumbai, 29th April 2023: India’s renowned edtech platform, BYJU’s, is under investigation by the Enforcement Directorate (ED) for potential violations of the Foreign Exchange Management Act (FEMA). The ED, responsible for enforcing economic laws and regulations in India, carried out searches at three of BYJU’s offices in Delhi, Mumbai, and Bengaluru. The investigation focuses on alleged FEMA rule breaches regarding foreign investments by exceeding the foreign funding limit and engaging in irregular transactions with overseas entities.
BYJU’s, with a valuation of over $22 billion, has received significant foreign investments and expanded its business globally, with notable investors such as Facebook founder Mark Zuckerberg. However, the company allegedly received foreign direct investment worth approximately Rs 28,000 crore from 2011 to 2021, remitted Rs 9,754 crore to various foreign jurisdictions, and booked about Rs 944 crore in the name of advertising and marketing expenses, including the amount remitted abroad.
The ED’s actions come at a time when the Indian edtech sector is experiencing increased scrutiny due to heightened demand amid the COVID-19 pandemic. With significant domestic and foreign investment, concerns have arisen regarding the regulatory oversight of edtech companies. The probe agency has reportedly seized various incriminating documents and digital data during the search at BYJU’s offices as stated by ED via tweet
ED has conducted searches at 3 premises in Bengaluru in the case of Raveendaran Byju and his company ‘Think & Learn Private Limited’ (Byju online learning platform) under the provisions of FEMA. During the search, various incriminating documents and digital data was seized.
— ED (@dir_ed) April 29, 2023
Moreover, the investigation revealed that BYJU’s has purportedly not prepared its financial statements since the financial year 2020-21 and has not had its accounts audited. The ED claims that they had summoned BYJU’s co-founder and CEO, Raveendran, several times during the investigation, but he remained evasive and never appeared.
BYJU’s has acquired various educational companies, such as Great Learning Pvt. Ltd., Epic!, Aakash Educational Services Ltd., WhiteHat Jr., Osmo, TutorVista, and Edurite from Pearson. These acquisitions aimed to make quality education accessible to all through personalised learning programs and cutting-edge technology. The company has won numerous accolades in the education sector and attracted noteworthy investors worldwide.
The transition from traditional classrooms to online classes and blended learning has become the way forward for educational institutions and companies due to technological advancements. BYJU’s, being a homegrown Indian company, brought together India’s best teachers, personalised learning programs, and cutting-edge technology to make quality learning accessible to all.
