ED Investigates BYJU’S for Alleged Rs 9,000 Cr FEMA Violation

• ByStartupStory     |    November 21, 2023

BYJU’S, a prominent edtech company, is reportedly facing scrutiny from the Enforcement Directorate (ED) concerning alleged Foreign Exchange Management Act (FEMA) violations totaling Rs 9,000 crore. While BYJU’S stated no reception of an ED notice, The Economic Times anticipated an impending statement from the ED on this matter.

The Bengaluru-based company explicitly denied reports insinuating any notice receipt from the Enforcement Directorate. This denial comes amid ED scrutiny, which has been assessing BYJU’S FEMA compliance since 2011. Simultaneously, the edtech firm has also drawn attention from the Ministry of Corporate Affairs and the Directorate General of GST Intelligence.

Earlier in April, ED conducted searches at three Bengaluru locations associated with BYJU’S, focusing on alleged foreign exchange law violations. These searches led to the seizure of incriminating documents and digital data, according to the ED. 

The agency reported that BYJU’S received approximately Rs 28,000 crore in foreign direct investment between 2011 and 2023, transferring Rs 9,754 crore to foreign jurisdictions as overseas direct investments during the same period.

This development emerges amid the company’s multiple challenges, including a liquidity crunch. Recently, Ranjan Pai, Chairman of Manipal Education and Medical Group, purchased Rs 1,400 crore debt in BYJU’S test preparation unit to aid in repaying a loan obtained from a US-based lender. Furthermore, BYJU’S disclosed specific financial figures for its core business in the fiscal year 2021-22, revealing increased total income but a decreased EBITDA loss compared to the previous fiscal year.

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