Mumbai - India's financial crime-fighting agency, the Enforcement Directorate (ED), announced on Saturday that it had conducted raids on three locations related to the popular education platform Byju's and its founder and CEO Byju Raveendran on suspicion of violating the country's foreign exchange regulations. During the operation, the ED seized several documents and digital data and summoned the CEO for questioning, but he did not attend.
India's online education platform Byju's and its CEO Byju Raveendran are under investigation by India's financial crime-fighting agency, the Enforcement Directorate (ED), over alleged breaches of the country's foreign exchange laws. The ED raided three premises related to Byju's and seized various documents and digital data during the search. The agency has also issued summons for Raveendran, who did not appear. However, a legal spokesperson for Byju's said that the visit by ED officials to one of the company's offices in Bengaluru was related to a routine inquiry under foreign exchange laws, and they would continue to work closely with the authorities to resolve the matter.
The recent searches conducted by India's financial crime-fighting agency on three premises linked to educational platform Byju's and its CEO come at a time when Indian startups are facing challenges in raising funds and justifying their high valuations to investors. Byju's usage had surged during the pandemic, but as educational institutions resumed in-person classes, the platform laid off 2,500 of its 50,000 employees. In May 2021, the company reported a loss of 45.64 billion rupees ($558.49 million) for the fiscal year. Byju's legal spokesperson said the ED's visit was related to a routine inquiry under foreign exchange laws and that the company would work closely with the authorities to resolve the matter satisfactorily.
Education platform Byju's spent a significant amount of money, $2.5 billion, in the fiscal year ended March 2022 to acquire various companies including Aakash, Epic, Tynker, Great Learning, and Toppr. However, Byju's is now facing scrutiny as the Enforcement Directorate (ED) has raided three of its premises and issued a summons for CEO Byju Raveendran over suspected foreign exchange law breaches. Byju's legal spokesperson has stated that the visit was related to a routine inquiry under foreign exchange laws, and they will work closely with authorities to resolve the matter satisfactorily. Byju's has been facing investor concerns over its high valuations and recently saw its valuation slashed by almost half to $11.15 billion by New York-based investment firm BlackRock in a private assessment. The company reported a loss of 45.64 billion rupees ($558.49 million) in May for fiscal 2021 and laid off 2,500 employees as educational institutions resumed in-person classes.
India's Enforcement Directorate (ED) has alleged that Byju's, the edtech firm, made illegal remittances worth INR 97.5bn ($1.3bn) to various overseas jurisdictions in the name of overseas direct investments between 2011 and 2023. The ED has also accused the company of failing to prepare its financial statements or have its accounts audited. A Byju's spokesperson said that the company had cooperated with the authorities and provided them with all the information they requested, adding that they had confidence in the integrity of their operations. This comes as Indian start-ups face difficulty in raising funds and have been questioned over their high valuations.