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Monday, December 4, 2023

Byju edutech unicorn was raided by the ED for alleged FEMA violations.


Byju edutech : On April 29, the offices of Byju edutech, an online private education portal based in Bengaluru, were searched by the Directorate of Enforcement (ED) as part of an investigation into potential violations of the Foreign Exchange Management Act (FEMA). The ED raided two business locations linked to the company and one residential home belonging to Byju’s founder Raveendran Byju.

ED raided two business locations Byju's edutech
ED raided two business locations of Byju’s edutech

According to an ED statement, Byju’s received 28,000 crores in foreign direct investment (FDI) and made 9,754 crores in overseas direct investment between 2011 and 2023, both of which are under investigation. The company also recorded approximately 944 crore in advertising and marketing costs, including payments to foreign nations. However, since the financial year 2020-2021, the company has not prepared its financial statements or had its accounts audited, which is a legal requirement. As a result, banks are scrutinizing the accuracy of the company’s reported figures.

Byju's Offices in Bengaluru Raided by Enforcement Directorate in FEMA Investigation

The investigation into Byju’s was initiated based on allegations from various sources. Raveendran Byju has been summoned by the ED on multiple occasions, but has not appeared during the investigation. The ED’s recent visit to Byju’s Bengaluru office is part of a routine FEMA investigation, according to the agency.

Byju’s legal team responded to the ED’s raid by asserting that they have been fully cooperative with the authorities and have provided all the information required. In a statement, the company stated, “We are committed to upholding the highest standards of compliance and ethics, and we have complete faith in the integrity of our employees and our operations. We are confident that this matter will be resolved promptly and satisfactorily, and we will continue to work closely with the authorities to ensure they have all the information they need.”

The investigation into Byju’s has drawn significant attention as the company has rapidly expanded its reach in the Indian education market. The company, which was founded in 2011, has received extensive funding from various sources, including high-profile investors such as the Chan Zuckerberg Initiative and the Qatar Investment Authority. Byju’s has also made several high-profile acquisitions in recent years, including the popular education app WhiteHat Jr.

The outcome of the investigation is uncertain at this time. However, the raid and ongoing inquiry could have significant implications for Byju’s and the broader Indian education sector.


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