BYJUS writes to shareholders with audit report, says no FEMA violations found

The Enforcement Directorate's (ED) investigation into alleged violations of the Foreign Exchange Management Act (FEMA) by edtech major BYJU'S and its CEO and Co-Founder Raveendran Bjyu is nearing completion, according to official sources. The development comes as BYJU'S has written to its shareholders with an audit report from a law firm that found no FEMA violations by the company.

No FEMA Violations Found

In its email to shareholders, BYJU'S said, "We are attaching an email from... one of India's largest and most trusted law firms, which highlights the results of a comprehensive due diligence conducted on BYJU'S. The email confirms that the due diligence found no FEMA violations at BYJU'S."

The company has maintained a cooperative stance with the ED throughout its inquiries, and has satisfactorily answered all queries, both verbally and on record. BYJU'S emphasized that it continues to operate in full adherence to regulatory frameworks.

Showcause Notice Expected

The ED sources have indicated that the adjudicating authority of the FEMA may soon serve a showcause notice on BYJU'S. The notice will ascertain the amount of funds contravened under FEMA.

In response to press reports alleging a contravention of Rs 9,000 crore by the company under the forex law, BYJU'S issued a statement unequivocally denying any FEMA violation. The company has not received any such communication from authorities.

ED's Findings

During searches conducted in April, the ED seized various incriminating documents and digital data. It alleged that Think & Learn Pvt Ltd, the company operating BYJU'S, had not prepared its financial statements since 2020-21 and had not got the accounts audited, which is mandatory. The company filed its 2021-22 results after a long delay earlier this month.

The ED also alleged that Raveendran Bjyu was issued several summons but remained evasive and never appeared before the agency. The searches revealed that the company received Foreign Direct Investment (FDI) to the tune of about Rs 28,000 crore during 2011-2023, and remitted about Rs 9,754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment.

About BYJU'S

BYJU'S, based in Bengaluru, provides early learning, middle school education, and test preparation, among others. Raveendran Bjyu co-founded the e-learning company with his wife Divya Gokulnath. Earlier this month, the company reported a narrowing of operational losses in its core business to Rs 2,253 crore for 2021-22.

As the ED's investigation into BYJU'S nears completion, the company maintains its commitment to regulatory compliance. The issuance of a showcause notice is expected, and the amount of funds contravened under FEMA will be determined. BYJU'S continues to operate and assures its stakeholders of its adherence to regulatory frameworks.