India’s Directorate of Enforcement (ED) raided the offices of ed-tech unicorn Byju’s in Bengaluru, Karnataka on Saturday (April 29). The ED raided two business premises linked to the company and one residential property linked to its founder Raveendran Byju, under provisions of the Foreign Exchange Management Act (FEMA).
According to ED, the officials managed to seize incriminating pieces of documents and digital data during the raid. The agency noted that Byju’s received Foreign Direct Investment (FDI) worth Rs 28,000 crore ($3.4 billion) between 2011 and 2023. Moreover, the company sent Rs 9,754 crore ($1.1 billion) overseas as FDI which is currently under the scanner.
Think and Learn Pvt Ltd, which runs the online private education portal, spent around Rs 944 crores ($115 million) on advertisement and marketing expenses. Notably, the ed-tech giant has not prepared its financial books since FY20-21 and is yet to get audited, which is a mandatory practice.
“We have nothing but the utmost confidence in the integrity of our operations, and we are committed to upholding the highest standards of compliance and ethics. We will continue to work closely with the authorities to ensure that they have all the information they need, and we are confident that this matter will be resolved in a timely and satisfactory manner.”
According to the agency, despite receiving multiple summons from the ED, Raveendran has remained ‘evasive’ and never appeared during the investigation.
Byju’s fires 2,500 employees
Despite having a war chest in funding, Byju’s last year in October terminated the contract of over 2,500 employees, sending shockwaves across the ed-tech sector. Founder-CEO Byju Raveendran said at the time that he would see that laid-off workers were given access to newly established relevant positions and that they would be rehired.
“I have already instructed our HR leaders to make all the newly created relevant roles available to you on an ongoing basis,” Raveendran wrote in an email to employees on October 31.
The company has also been in controversy for using predatory practices to brainwash parents and get their wards signed up for highly expensive courses. Last year, India’s apex child rights body the National Commission for Protection of Child Rights (NCPCR) summoned Raveendran over the issue.
“The Commission is in observance that indulging into malpractices to lure the parents or children into entering loan-based agreements and then causing exploitation is against the welfare of children and in pursuance of the functions and powers under Section 13 and 14 of CPCR Act, 2005,” said the commission.
(With inputs from agencies)
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