BYJU's asked to pay Rs 9,000 cr for violating foreign funding laws

New Delhi: An Enforcement Directorate (ED) investigation into alleged foreign exchange law violations by edtech major BYJU's and its CEO and co-founder Raveendran Bjyu is in the final stages of completion following which a show cause notice could be served to them, official sources said Tuesday.

The federal probe agency had in April searched two business and one residential premises, including that of the registered company of BYJU's -- Think & Learn Pvt. Ltd. -- under the provisions of the Foreign Exchange Management Act (FEMA).

The probe against BYJU's has been going on since then and the adjudicating authority of the FEMA may soon serve a show cause notice to the company, the sources said.

The amount of funds contravened under the FEMA will be ascertained in this notice, they said.

The company, reacting to press reports that alleged contravention of Rs 9,000 crore by the company under the forex law, issued a statement saying that it "unequivocally denies media reports that insinuates BYJU's of any FEMA violation".

"The company has not received any such communication from authorities," BYJU's said in a post on X.

pic.twitter.com/6fWEQUd7X1

— BYJU'S (@BYJUS) November 21, 2023

The ED had in April claimed in a statement that it seized various "incriminating documents and digital data" after the searches.

It had alleged "the company (Think & Learn Pvt. Ltd.) has not prepared its financial statements since 2020-21 fiscal and has not got the accounts, audited which is mandatory."

The ED said the searches were conducted on the basis of "various complaints" received by private people and alleged that Raveendran Bjyu was issued "several" summons but he remained "evasive and never appeared" before the ED.

The searches found that the company received foreign direct investment (FDI) to the tune of about Rs 28,000 crore during 2011-2023.

"The company also remitted about Rs 9,754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment," the agency said.

"The company has booked around Rs 944 crore in the name of advertisement and marketing expenses including the amount remitted to foreign jurisdiction," the ED alleged.

The Bengaluru-based company provides early learning, middle school education and test preparation, among others and Raveendran Bjyu co-founded the e-learning company with his wife Divya Gokulnath.

The company earlier this month reported narrowing of operational losses in core business to Rs 2,253 crore for the 2021-22 fiscal.