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NEW DELHI: Byju Raveendran, the founder and group CEO of troubled edtech startup Byju’s in a letter to the firm’s shareholders on Tuesday said that the company has always been fully compliant with Foreign Exchange Management Act (FEMA) regulations. In his attempt to assuage the concerns of shareholders, Raveendran cited instances from a due diligence process conducted by a law firm which found no FEMA violationsat Byju’s.“We are attaching an email from….one of India’s largest and most trusted law firms, which highlights the results of a comprehensive due diligence conducted on Byju’s. The email confirms that the due diligence found no FEMA violations at Byju’s,” Raveendran said in the letter which was reviewed by TOI.
Raveendran’s move was in response to reports which said that the Enforcement Directorate (ED) has found alleged forex violations amounting to Rs 9,000 crore by the edtech firm. “Byju’s unequivocally denies media reports that insinuate it has received any notice from the Enforcement Directorate. The company has not received any such communication,” the firm said in a statement issued earlier in the day.
Raveendran said that Byju’s has maintained a cooperative stance with the ED throughout their inquiries. “We have satisfactorily answered all their queries, both verbally and on record. We understand that such news can create uncertainty and concern, but we want to assure you that Byju’s continues to operate in full adherence to regulatory framework,” Raveendran added.
In April this year, the ED had conducted searches and seizure action at three premises in Bengaluru belonging to Byju’s under FEMA provisions. The ED had then said that the startup remitted nearly Rs 9,754 crore through 2011-2023 to various foreign jurisdictions in the name of overseas direct investment. The company, it had said, booked Rs 944 crore in the name of advertisement and marketing expenses including the amount remitted to foreign jurisdictions.
The recent developments come at a time when Byju’s is trying to sell some of its assets like Epic and Great Learning to repay $1.2 billion term loan to lenders. Valued at $22 billion at its peak and having raised more than $5 billion from investors since its inception, Byju’s has been mired in a series of crises including scrutiny of regulators following the abrupt resignation of its former auditor Deloitte and three board members in June. Byju’s which faced a series of valuation markdowns was valued at $5.1 billion by its investor Prosusearlier this year.
Raveendran’s move was in response to reports which said that the Enforcement Directorate (ED) has found alleged forex violations amounting to Rs 9,000 crore by the edtech firm. “Byju’s unequivocally denies media reports that insinuate it has received any notice from the Enforcement Directorate. The company has not received any such communication,” the firm said in a statement issued earlier in the day.
Raveendran said that Byju’s has maintained a cooperative stance with the ED throughout their inquiries. “We have satisfactorily answered all their queries, both verbally and on record. We understand that such news can create uncertainty and concern, but we want to assure you that Byju’s continues to operate in full adherence to regulatory framework,” Raveendran added.
In April this year, the ED had conducted searches and seizure action at three premises in Bengaluru belonging to Byju’s under FEMA provisions. The ED had then said that the startup remitted nearly Rs 9,754 crore through 2011-2023 to various foreign jurisdictions in the name of overseas direct investment. The company, it had said, booked Rs 944 crore in the name of advertisement and marketing expenses including the amount remitted to foreign jurisdictions.
The recent developments come at a time when Byju’s is trying to sell some of its assets like Epic and Great Learning to repay $1.2 billion term loan to lenders. Valued at $22 billion at its peak and having raised more than $5 billion from investors since its inception, Byju’s has been mired in a series of crises including scrutiny of regulators following the abrupt resignation of its former auditor Deloitte and three board members in June. Byju’s which faced a series of valuation markdowns was valued at $5.1 billion by its investor Prosusearlier this year.
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