ED slaps over Rs 9,300 crore FEMA notice against BYJU's, main promoter Raveendran

The Enforcement Directorate on Tuesday said it has issued a foreign exchange violation show cause notice of more than Rs 9,300 crore against edtech major BYJU's and its CEO and co-founder Raveendran Bjyu. The federal probe agency mentioned multiple grounds for charging the company and its chief promoter that included charges of "failing" to submit documents of imports against advance remittances made outside India; failing to realise proceeds of exports made outside India by delayed filing of documents against the Foreign Direct Investment (FDI) received into the company, among others.

It said in a statement that a show cause notice has been issued to the registered company of BYJU's--Think & Learn Private Limited-- and Raveendran with respect to the contraventions of the provisions of the Foreign Exchange Management Act (FEMA) to the tune of Rs 9,362.35 crore.

Post final adjudication, the ED has powers to penalise FEMA violators up to three times the value of the amount mentioned in the show cause notice.

The agency said statements of Raveendran and BYJU's chief financial officer were recorded after it carried out searches in this case at three premises, including at Raveendran's house, at Bengaluru in April.

It said the action was undertaken after complaints were received regarding the foreign investment received by Think & Learn Private Limited and the "business conduct" of the company.

The company, in the complaint, was stated to have made significant foreign remittances outside India and investments abroad which were allegedly in contravention of provisions of FEMA, 1999 and caused loss of revenue to the government of India, the ED said.

On conclusion of the investigation, the ED said, it was found that Think & Learn Private Limited and Raveendran have "contravened" the provisions of FEMA by failing to submit documents of imports against advance remittances made outside India; by failing to realise proceeds of exports made outside India; by delayed filing of documents against the Foreign Direct Investment (FDI) received into the company; by failing to file documents against the remittances made by the company outside India and by failing to allot shares against FDI received into the company.

After the April searches, the ED had said that "the company (Think & Learn Pvt. Ltd.) has not prepared its financial statements since 2020-21 fiscal and has not got the accounts, audited which is mandatory."

The searches found that the company received foreign direct investment (FDI) to the tune of about Rs 28,000 crore during 2011-2023.

"The company also remitted about Rs 9,754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment," the agency had said.

The company booked around Rs 944 crore in the name of advertisement and marketing expenses including the amount remitted to foreign jurisdiction, the ED alleged.

The Bengaluru-based company provides early learning, middle school education and test preparation, among others and Raveendran Bjyu co-founded the e-learning company with his wife Divya Gokulnath.

The company earlier this month reported narrowing of operational losses in core business to Rs 2,253 crore for the 2021-22 fiscal.