ED searches BYJU'S CEO's premises over violating foreign funding laws
The Enforcement Directorate (ED) on Saturday, searched three premises belonging to Byju Raveendran, the founder and CEO of Think and Learn Private Ltd. It runs the edtech platform BYJU'S. The agency conducted searches at Byju's residence and offices in Bengaluru, under the provisions of the Foreign Exchange Management Act (FEMA). It also said that 'incriminating' digital data and documents were seized.
What did ED say?
As per ED, foreign direct investment (FDI) worth Rs. 28,000 crore was allegedly bagged by Think and Learn Private Ltd between 2011-23. During the same time, the firm remitted funds worth Rs. 9,754 crore to foreign entities by calling it an overseas direct investment. However, the company did not get its books audited, and now ED wants to ascertain whether the figures are genuine.
What is the issue?
Think and Learn Private Ltd allegedly earmarked roughly Rs. 944 crore, in the name of advertising and marketing expenses. This sum included the amount that was "remitted to foreign jurisdiction." However, shockingly since the financial year 2020-21, the firm did not prepare financial statements nor get its accounts audited. Hence, ED is cross-checking the company's provided figures with that from the banks.
How did the issue come to light?
ED started an investigation against Think and Learn Private Ltd after it received complaints from several private individuals. The agency claimed that during its investigation, multiple summonses were issued to Byju Raveendran. However, the BYJU'S top boss "always remained evasive" and "never" appeared when called. This might be an instance of financial fraud but its scale is not yet fully known.
How did BYJU'S respond to the allegations?
BYJU'S legal team claimed that the ED searches were related to a routine inquiry under FEMA, and that it provided the probing agency with all requested information. It also said that the matter would be resolved in a "timely and satisfactory manner."
