Why Enforcement Directorate has restricted Byju Raveendran from leaving India
Acting on the Enforcement Directorate's (ED) order, the Bureau of Immigration (BOI) has issued a lookout circular (LOC) against Byju Raveendran, the founder and CEO of BYJU'S. The move prevents Raveendran from leaving the country while ED investigates alleged violations of Rs. 9,362.35 crore under the Foreign Exchange Management Act (FEMA). An LOC 'on intimation' was previously issued against him in 2022 which required immigration authorities to inform ED about Raveendran's foreign travel.
Alleged FEMA violations and show-cause notices against Raveendran
In November 2023, the ED sent show-cause notices to BYJU'S parent company, Think & Learn Pvt Ltd, and Raveendran for allegedly breaching FEMA provisions. The agency claimed that the company made significant foreign remittances and investments abroad, resulting in a loss of revenue for the Indian government. With the fresh notice, authorities can stop Raveendran from traveling outside of India while the earlier LOC 'on intimation' required immigration authorities to only notify a probe agency of his overseas travels.
Purpose and functioning of look out circular against Raveendran
The ED's Bengaluru office has decided to issue an LOC against Raveendran to ensure he doesn't escape from India during the ongoing investigation. It is reported that a "revised" LOC was deemed necessary in the "interest of investors." Raveendran has been traveling between Delhi and Dubai for work over the past three years, visiting Bengaluru earlier this week and Delhi last week.
Investors of BYJU'S want Raveendran ousted from the board
While authorities don't want Raveendran to leave India, BYJU's investors want him out of the company's leadership. Investors allege that there are a host of troubles ailing the edtech firm, including governance issues, financial mismanagement and compliance concerns. For these reasons, the investors have demanded an emergency general meeting that is scheduled for February 23. Investors have also demanded a reorganizing of the board at the meeting.
Raveendran assures of transparency as company raises fresh capital
Raveendran has assured investors that he will ensure transparency in business operations along with restructuring the board. BYJU'S has managed to raise $200 million by means of rights issue but at a 99% valuation cut. Raveendran mentioned in a letter to investors that in order to ensure transparency in the utilization of these funds, a third-party agency will be hired. It will oversee the funds and report to shareholders on a quarterly basis.
