Enforcement Directorate Issues Rs 9,300 Crore Foreign Exchange Violation Notice to BYJU’s and Co-founder Raveendran
The Enforcement Directorate (ED) has issued a show cause notice of over Rs 9,300 crore against edtech giant BYJU’s and its CEO and co-founder Raveendran Bjyu for foreign exchange violations. The federal probe agency cited various grounds for charging the company and its CEO, including failure to submit documents of imports against advance remittances made outside India, delayed filing of documents against Foreign Direct Investment (FDI), and failure to realize proceeds of exports made outside India.
According to the ED, a show cause notice has been issued to Think & Learn Private Limited, the registered company of BYJU’s, and Raveendran, for contraventions of the provisions of the Foreign Exchange Management Act (FEMA) amounting to Rs 9,362.35 crore. The agency also stated that, post final adjudication, it has the power to penalize FEMA violators up to three times the value of the amount mentioned in the show cause notice.
The ED’s action was taken after complaints were received regarding the foreign investment received by Think & Learn Private Limited and the business conduct of the company. The agency alleged that the company made significant foreign remittances and investments abroad, which were reportedly in violation of FEMA provisions and caused loss of revenue to the Indian government.
During the investigation, the ED found that the company and Raveendran contravened FEMA provisions by failing to submit documents of imports against advance remittances made outside India, failing to realize proceeds of exports made outside India, delayed filing of documents against FDI received into the company, failing to file documents against remittances made outside India, and failing to allot shares against FDI received into the company.
In addition, the searches revealed that Think & Learn Private Limited did not prepare its financial statements since the 2020-21 fiscal year and failed to get the accounts audited. The company received FDI of about Rs 28,000 crore during 2011-2023 and remitted approximately Rs 9,754 crore to various foreign jurisdictions in the name of overseas direct investment. The ED alleged that the company also booked around Rs 944 crore in the name of advertisement and marketing expenses, including the amount remitted to foreign jurisdictions.
BYJU’s, based in Bengaluru, offers early learning, middle school education, and test preparation. Its co-founder, Raveendran Bjyu, established the e-learning company with his wife, Divya Gokulnath. Earlier this month, the company reported a narrowing of operational losses in its core business to Rs 2,253 crore for the 2021-22 fiscal year.
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