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Edtech giant Byju’s issued a statement on Wednesday in response to the show cause notices served by the Enforcement Directorate (ED) concerning alleged violations under the Foreign Exchange Management Act (FEMA). The notices, totaling ₹9,362 crore, were directed at Byju’s founder, Byju Raveendran, and the parent company, Think and Learn Pvt Ltd.
ED’s Allegations and Byju’s Rebuttal
The ED had accused Byju’s and its founder of contravening FEMA provisions related to the failure to submit import documents against advance remittances made outside India, delayed filing of documents for Foreign Direct Investment (FDI), and not realizing proceeds of exports made outside India. In response, Byju’s emphasized that it remains fully compliant with FEMA regulations and denounced any implication of wrongdoing.
Queries Addressed as Technical in Nature
Byju’s clarified that the queries raised in the notice are purely technical, focusing on the delay in filing Annual Performance Reports (APRs) concerning compliant Overseas Direct Investment (ODI) of nearly ₹8,000 crores. The platform affirmed that it promptly filed necessary intimation for all FDI received in accordance with legal criteria, unaffected by the alleged non-filing of APRs. Byju’s also underlined the timely issuance and allotment of shares against the received FDI.
Confidence in Handling the Case
Expressing confidence in successfully addressing the case, Byju’s categorized the delayed filing of APRs as a technical issue. The company anticipates nominal fines, drawing attention to the Late Submission Fee for reporting delays imposed by RBI regulations, which is deemed very nominal at ₹7,500. Byju’s emphasized that the ED notice does not specify any fine quantum but highlights the FDI/ODI amount (~₹9,000 crores) and the associated missed deadlines during the reference period.
Background: Previous ED Actions
This is not the first encounter between Byju’s and the ED concerning FEMA violations. In April of this year, the ED conducted raids on three premises associated with the company over similar allegations. The searches revealed that Byju’s parent company, Think and Learn Pvt Ltd, received foreign direct investment of around ₹28,000 crores from 2011 to 2023. The company allegedly remitted ₹9,754 crores to various foreign jurisdictions during the same period under the guise of overseas direct investment.