ED searched three premises linked to Byju’s on Saturday in Bangalore over alleged foreign exchange law violations. After that Raveendran Byju, the CEO of Byju’s, wrote to the employees that the company fetched more FDI (Foreign Direct Investment) to India than any other start-up. He also assured that Byju’s complies with all applicable foreign exchange laws completely.
Memo released by Byju’s CEO
Raveendran wrote in the memo, “As we are funded by 70+ impact investors who have satisfactorily done due diligence on our operations, including all FEMA (Foreign Exchange Management Act) compliance, we are confident that the authorities will also come to the same conclusion.” However, ED said, “various incriminating documents and digital data was seized”, when they searched the Think & Learn Private Limited premises.
Raveendran added, “The recent visit by the ED is an enquiry under FEMA. The information requested by and furnished to the officers in connection with the FDI raised, overseas investments made, and cross-border transactions relating to marketing and branding activities by Byju’s has previously been submitted by our authorised representatives.”
He further said, “I also want to highlight that Byju’s has brought more FDI to India than any other Indian startup (₹28,000 crore), and as a result, we have been able to create job opportunities for more than 55,000 talented professionals.” He added, “This makes us India’s largest employer among startups.”
ED said that the company remitted Rs. 9754 crores to several foreign jurisdictions between 2011 and 2023 when they acquired funding in the name of overseas direct investments. The CEO responded to it by saying, “These acquisitions have been instrumental in expanding our reach and impact. In order to fund these acquisitions, we have remitted some of our funding overseas.”
The officials said, Byju’s booked around Rs. 944 crores for marketing and advertisement expenses. Moreover, it did not prepare financial statements since the financial year 2020-2021. The company did not get their accounts audited either which is mandatory. The ED added, “Hence, the genuineness of the figures provided by the company are being cross examined from the banks.”
The memo further reads, “All our cross-border transactions have been duly vetted by both its professional advisors/counsel and advisors/counsel of the investment funds and other sophisticated counterparties.” He also wrote, “Additionally, all such transactions are routed only through regular banking channels/the RBI’s authorised dealer banks and the requisite documentation and statutory filings have been duly submitted.”
The investigation against Byju’s had been initiated based on several complaints received from citizens. Several summons were issued to Raveendran during the investigation but he remained evasive and never appeared during the inquiry.
The legal team of Byju’s states
Byju’s legal team released a statement saying, “routine inquiry under FEMA,” about the ED raids. According to the CEO, the company is fully cooperating with the investigative authority. He said, “Let us continue to focus on our goals and work together towards achieving our mission.”