The Enforcement Directorate (ED) has recently issued a fresh look-out notice against Byju Raveendran, the prominent entrepreneur in the edutech industry. This action is part of an ongoing inquiry into alleged violations of the Foreign Exchange Management Act (FEMA), involving a significant sum of ₹9,362.35 crore.
This move comes after the FEMA Adjudicating Authority issued show cause notices to Think & Learn Private Limited, the entity behind the education platform Byju’s, and Mr. Raveendran, following complaints from the ED in November of the preceding year.
The investigation revolves around accusations concerning foreign investments received, substantial foreign remittances, and overseas investments made by the company, purportedly in breach of the Act, leading to potential losses to the national treasury.
Among the allegations, the agency contends that the company and Mr. Raveendran failed to provide documentation regarding imports against advance remittances made outside India, neglected to realize proceeds from exports abroad, delayed filing necessary documents related to Foreign Direct Investment (FDI) received by the company, and omitted to allot shares against the FDI received.
Earlier claims by the ED suggested that Byju's received approximately ₹28,000 crore of FDI between 2011 and 2023, while remitting about ₹9,754 crore to various foreign jurisdictions during the same period, ostensibly under the guise of overseas direct investment.
Furthermore, concerns have been raised regarding the company's financial transparency, as it allegedly failed to prepare financial statements since the financial year 2020-21 and did not undergo mandatory audits. This lack of financial clarity prompted the ED to scrutinize the figures provided by the company with the assistance of banking institutions.
Meanwhile, amidst financial upheaval within Byju's, a group of significant investors has called for an extraordinary general meeting aimed at removing Byju Raveendran and his family members from leadership positions due to perceived mismanagement and failures. However, the Karnataka High Court has intervened, ruling that any proposed resolutions from this meeting will remain ineffective until the final hearing and disposition of a petition filed by Think & Learn Private Ltd., the parent company of Byju's.
Simultaneously, the ED has requested the Bureau of Immigration (BOI) to issue a look-out circular (LOC) against Raveendran, indicating the gravity of the ongoing investigation into the alleged FEMA violations.
