ED Crackdown: Byju’s Slapped With Rs 9,000 Crore Show Cause Notice, Edtech Firm Issues Denial

Indian educational technology company, Byju's has reportedly been served a show-cause notice for the Enforcement Directorate (ED) for alleged Foreign Exchange Management Act (FEMA) violations amounting to Rs 9,000 crore. However, later a Byju's spokesperson rejected reports on the finding and was quoted by The Economic Times as saying, "Byju's unequivocally denies media reports that insinuate it has received any notice from the Enforcement Department.

The company has not received any such communication from the Enforcement Department." The notice extends to Byju Raveendran, founder of Byju's, and Think and Learn Pvt Ltd. The ED's action follows an investigation into potential FEMA contraventions by the edtech giant.

According to the report, Byju's' legal counsel said that no communication had been received from the Directorate. "My clients have confirmed they have not received any communication from the ED until this afternoon. I am not sure where this is coming from," said Zulfiquar Memon, the counsel, who is with the law firm MZM Legal.

"Dear shareholders... We want to assure you that Byju's has always been fully compliant with FEMA regulations. The news story in question is entirely based on hearsay and lacks any factual basis," said the edtech giant in an email sent to its shareholders according to a media report.

In April, the ED said that it carried out searches on several premises linked to Byju's, as part of an investigation into alleged violations of the FEMA in investments received and transfer of funds abroad by the edtech startup. In a press release then, the ED stated that it was cross-checking the genuineness of figures that the company provided to banks.

According to the agency, the searches revealed that Think & Learn, which runs Byju's education platform, had received foreign direct investments worth Rs 28,000 crore between 2011 and 2023.

During that period, it had also remitted around Rs 9,754 crore to several foreign jurisdictions "in the name of overseas direct investment", said the release.

The company had booked approximately Rs 944 crore as advertising and marketing expenses, including part of the amount remitted to foreign jurisdictions, it added, observing that these transactions had been cross-checked.