The Enforcement Directorate (ED) has extended its monitoring of Byju Raveendran, the founder of Byju’s, by renewing a lookout circular (LOC). This action is part of the ED’s ongoing investigation into Byju’s under the Foreign Exchange Management Act (FEMA). A lookout circular is a notification issued to authorities at various entry and exit points across the country to keep track of Raveendran’s movements.
The initial issuance of the LOC occurred over a year ago when the ED commenced its inquiry into the matter. This renewal suggests that the ED is intensifying its scrutiny of Raveendran and Byju’s regarding potential violations of FEMA regulations.
ED Renews Lookout Notice for Byju Raveendran
Officials familiar with the matter disclosed that the Enforcement Directorate (ED) renewed the lookout circular (LOC) earlier this month for Byju Raveendran, stipulating that the ED must be notified if he leaves the country. As per the agency’s information, Raveendran is presently outside of India. Hindustan Times (HT) has contacted Byju’s for a comment on the situation. The article will be updated once they respond.
The ED is investigating allegations against Think and Learn Pvt Ltd, the entity operating Byju’s, regarding violations of India’s foreign exchange laws. The financial crimes probe agency contends that these violations have resulted in potential losses to the exchequer amounting to ₹9,362 crore. This latest renewal of the LOC and the ongoing probe underscores the heightened scrutiny facing Byju’s and its founder, Byju Raveendran, as they navigate the allegations of financial impropriety.
Byju’s and Raveendran Under ED Scrutiny for Alleged FEMA Violations
The Enforcement Directorate (ED) has accused Think and Learn Private Limited, the operating entity behind Byju’s, and its founder, Byju Raveendran, of breaching the Foreign Exchange Management Act (FEMA) provisions. In a statement from November 2023, the ED listed several alleged violations. These include not giving documents for imports paid in advance outside India and failing to receive payments for exports made abroad. Additionally, the company didn’t promptly submit documents for Foreign Direct Investment (FDI) it received or file documents for money sent out of India. Also, it didn’t allocate shares against the FDI received.
The adjudicating authority under FEMA, 1999, has issued show cause notices to Think and Learn Private Limited and Byju Raveendran based on a complaint filed by the ED under sub-section (3) of section 16 of FEMA, 1999. As per the ED’s statement, the total amount involved in these alleged contraventions amounts to ₹9,362.35 crore. This development intensifies the scrutiny faced by Byju’s and its founder, Raveendran, as they navigate the accusations of financial irregularities under FEMA regulations.
Byju’s Investigated for Breaking FEMA Rules and Overseas Investments
The Enforcement Directorate (ED) is looking into complaints about the foreign investment received by Byju’s and how the company conducted its business. According to the ED, Byju’s allegedly made significant foreign remittances and investments abroad, which may have gone against the rules of FEMA, 1999, causing loss of revenue for the Indian government.
After conducting raids in April 2023, the ED stated that Byju had received approximately ₹28,000 crore in foreign direct investment from 2011 to 2023. Furthermore, the company supposedly sent out ₹9,754 crores to various foreign locations during the same period, labelled as overseas direct investment. These findings suggest a deeper scrutiny of Byju’s financial operations and its compliance with Indian regulations.
Byju’s Growth & Aakash Acquisition
Founded in 2011, Byju’s experienced significant growth during the Covid-19 pandemic, emerging as a prominent coaching firm. The pandemic-induced shift towards online learning platforms contributed to Byju’s surge in popularity and user base.
In addition to its core offerings, Byju’s expanded its educational portfolio by acquiring Aakash Educational Services. Aakash Educational Services specializes in providing courses for medical and engineering entrance exams, augmenting Byju’s offerings and strengthening its presence in the competitive exam preparation sector.
The acquisition of Aakash Educational Services further solidifies Byju’s position as a leading player in the education technology domain, enabling it to cater to a broader range of students seeking quality coaching and exam preparation resources.
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