The Enforcement Directorate (ED) on Saturday raided all the premises linked to edtech startup Byju’s over alleged foreign exchange violations. After this, on this raid of ED, Byju said in his statement that the ED officials who searched our premises is a routine enquiry. The company said that we have been completely transparent with the authorities and are fully cooperating with them. We have full confidence in the integrity of our operations and are committed to maintaining high standards of compliance and ethics.
Byju’s says that we will continue to work closely with the authorities to ensure that they have all the information they need, and we are confident that this matter will be resolved in a timely and satisfactory manner.
Searches were carried out at three premises, two official and one residential, belonging to founder Byju Raveendran and his company ‘Think and Learn Pvt Ltd’ under provisions of the Foreign Exchange Management Act (FEMA). ED says the company runs India’s most valued startup, online education platform Byju’s at $22 billion, and counts marquee investors including Tiger Global, Sequoia Capital, General Atlantic, Prosus, BlackRock and Tencent as its backers .
Incriminating documents digital data seized
The statement issued by the agency said that various incriminating documents and digital/official data have been seized during the search and seizure operation. The FEMA searches also revealed that the company allegedly received foreign investment of Rs 28,000 crore during the period 2011 to 2023. The company has booked around Rs 944 crore in the name of advertising and marketing expenses, which also includes remittances to foreign jurisdictions.
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The company has not prepared its financial details from the financial year 2020-21 nor has it got its accounts audited which is mandatory. Hence the genuineness of the data provided by the company is being verified with the banks. The investigation was initiated against the company on the basis of various complaints received from various private persons.
Byju’s problems started increasing
Let us tell you that Byju’s problems started coming to the fore when there was a delay in the audited financial statements of 2020-21. The company filed its audit results with a delay of 18 months and made major changes in its revenue recognition methods. The company is yet to make public its results for the year ending March 31, 2022. The delay in reporting income for the financial year 2021-22 has also prompted Byju’s to offer to increase the interest rate on its $1.2 billion term loan B (TLB).
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Lenders to Byju’s have sought prepayment of $200 million apart from higher interest rate as a precondition for restructuring the $1.2 billion loan. During FY-2021, Byjus is under investigation by the Directorate General of Goods and Services Tax Intelligence over alleged evasion But the matter was settled after the company agreed to pay its dues.