Edtech giant Byju’s Byju’s Faces ₹9000 Crore Forex Violation Allegations by the Enforcement Directorate (ED). This development follows a series of events and investigations into the company’s financial practices.
ED’s Allegations and Byju’s Response
The ED initiated an investigation into Byju’s forex transactions in April 2023. During the course of their probe, the agency reportedly found documents and digital data that raised concerns about the company’s financial conduct. The ED alleges that Byju’s received approximately ₹28,000 crore in foreign direct investment (FDI) between 2011 and 2023. Simultaneously, they claim that Byju’s remitted around ₹9,754 crore to various foreign jurisdictions during the same period under the guise of overseas direct investment.
Byju’s has strongly denied these allegations, issuing a statement that categorically denies any FEMA violations. The company asserts that it has not received any communication from authorities regarding these allegations.
— BYJU'S (@BYJUS) November 21, 2023
Additional Findings and Concerns
The ED’s investigation has unearthed additional issues related to Byju’s financial practices. It is alleged that the company has not prepared its financial statements since the fiscal year 2020-21, and its accounts have not undergone audits. This has raised suspicions about the accuracy and legitimacy of the financial figures provided by Byju’s. These figures are now under scrutiny by banks and regulatory authorities.
It is important to note that the investigation into Byju’s was initiated based on complaints from private individuals. During the investigation, the ED issued several summons to Byju Raveendran, the founder and CEO of the company. However, Raveendran did not appear for questioning.
Byju’s Journey and Recent Challenges
Byju’s, founded in 2011 by engineers and teachers Byju Raveendran and Divya Gokulnath, initially started by offering online learning programs for competitive exams. Over the years, it experienced significant growth, launching the popular Byju’s learning app in 2015, followed by math and progress-tracking apps. The COVID-19 pandemic further boosted its popularity as education shifted to a digital mode.
However, the company faced challenges, including a decline in value in 2021, largely attributed to a spree of acquisitions that became a financial burden as students returned to physical classrooms. Byju’s also faced allegations of coercing parents into purchasing expensive courses, treating employees poorly, and laying off thousands of workers as part of cost-cutting measures.
Internationally, Byju’s faced legal troubles when lenders filed a lawsuit in the United States, accusing the company of defaulting on payments and violating loan agreements. In response, Byju’s sued the lenders, alleging harassment.
As the ED’s investigation continues and allegations persist, Byju’s, once India’s most valued startup, faces a critical juncture in its journey, with its future uncertain.
Conclusion about the news: Byju’s Faces ₹9000 Crore Forex Violation Allegations
The allegations of forex violations against Byju’s have cast a shadow over the edtech giant’s reputation. With the ED’s investigation ongoing and Byju’s vehemently denying any wrongdoing, the future of this once-thriving company remains uncertain. As developments in this case unfold, it will undoubtedly impact the Indian edtech landscape and the perception of foreign investments in the sector.
[…] In addition to these internal challenges, Byju’s has faced external setbacks, including a significant markdown of its valuation by Netherlands-based tech investor Prosus NV, dropping to under $3 billion from its peak valuation of $22 billion. The Enforcement Directorate (ED) has also issued a show-cause notice of Rs 9,362 crore to Think & Learn, the parent company of Byju’s, and its founder, Byju Raveendran, for alleged violations of forex rules in attracting foreign investments from 2011 t…. […]