Amitha Reji George, Pune
The Enforcement Directorate (ED) has asked the Bureau of Immigration (BOI) to issue a lookout circular (LOC) against Byju Raveendran, the CEO, and founder of the edtech startup Byju’s. To prevent Raveendran from leaving the country, the ED contacted the BOI this month. In November 2023, ED issued show cause notices to the parent firm of Byju’s, Think & Learn Private Limited, and Raveendran for alleged Foreign Exchange Management Act( FEMA) violations totaling Rs 9,362.35 crore.
At the request of the ED’s Kochi office, a LOC ‘on intimation’ was issued against Raveendran about a year and a half ago. Yet the inquiry was afterward moved to the agency’s Bengaluru branch.
Raveendran has been making frequent trips between Delhi and Dubai for the past three years.
On April 27 and 28, of the previous year, the agency searched the sites of Byju and the apartment of Raveendran, obtaining papers about the company’s foreign activities and investments. The alleged breaches included non-compliance with filing requirements for remittances made outside of India, failure to realize revenue from exports done outside of India, and delayed submission of documentation for foreign direct investment (FDI), which resulted in a loss of money for the Indian government. The Central agency declared that it started an investigation in response to multiple complaints about Think and Learn Private Ltd.’s receiving of foreign capital and the company’s business practices.
The edtech company, once valued at over $20 billion and an icon of India’s startup scene, had severe losses and a valuation decline of about 90% in the previous year. Its auditor Deloitte has quit, and its remaining major investors have left. A legal battle involving a $1.2 billion loan between Byju’s and US lenders is also ongoing.
Byju Raveendran first offered classes in 2006 to help candidates for MBA programs prepare for the CAT exam. The edtech company progressively grew to include undergraduates and subsequently schoolchildren. The Byju’s learning app was released in 2015. It developed into the first ed-tech unicorn in the country in the following four years. Byju’s network grew quickly during the COVID-19 epidemic when school closures and online instruction occurred. Then the problems started. Reports of hostile workplaces and aggressive advertising that intimidated parents began to surface. the company reduced Byju’s worth by 75% in the previous year, which resulted in accusations of financial mismanagement and layoffs. The tech company spent a lot of money on sponsoring at its height. It signed football legend Lionel Messi as a global ambassador and sponsored the Football World Cup and the Indian cricket team. After the schools reopened, Byju’s faced massive losses. Byju Raveendran had to put his personal properties up for mortgage late last year in order to get a loan to cover employee payments.