BYJU’S shares email from law firm to shareholders, says ‘due diligence found no FEMA violations

PTI, Nov 22, 2023, 10:17 AM IST

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New Delhi: Edtech firm Think & Learn Pvt Ltd, which operates under the brand name of BYJU’S, has written to shareholders with an audit report of a law firm that found no FEMA violations by the company, sources said.

The development comes after official sources at the Enforcement Directorate said investigation into alleged foreign exchange law violations by the edtech major and its CEO and Co-Founder Raveendran Bjyu is in the final stages of completion, following which they would be served a showcause notice.

‘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 (Foreign Exchange Management Act) violations at BYJU’S,’ BYJU’S said in its email to shareholders.

The federal probe agency had in April searched two business and one residential premises, including that of the registered company of BYJU’s under FEMA provisions.

BYJU’S said it has maintained a co-operative stance with the ED throughout their inquiries.

‘We have satisfactorily answered all their queries, both verbally and on record. We understand that such news can create uncertainty and concern, but we want to assure you that BYJU’S continues to operate in full adherence to regulatory frameworks,’ the email said.

The probe against BYJU’s has been going on and the adjudicating authority of the FEMA may soon serve a showcause notice on the company, the ED sources said.

The amount of funds contravened under FEMA will be ascertained in this notice, they said.

The company, reacting to press reports on alleged contravention of Rs 9,000 crore by the company under the forex law, issued a statement saying that it ‘unequivocally denies media reports that insinuates BYJU’s of any FEMA violation’.

‘The company has not received any such communication from authorities,’ BYJU’s said in a post on X.

The ED had in April said in a statement that it seized various ‘incriminating documents and digital data’ after the searches.

It had alleged ‘the company (Think & Learn Pvt Ltd) has not prepared its financial statements since 2020-21 and has not got the accounts audited which is mandatory’.

The company filed its 2021-22 results after a long delay early this month.

The ED said the searches were conducted on the basis of ‘various complaints’ received by private people and alleged that Raveendran Bjyu was issued ‘several’ summons but he remained ‘evasive and never appeared’ before the ED.

The searches found that the company received Foreign Direct Investment (FDI) to the tune of about Rs 28,000 crore during 2011-2023, as per ED.

‘The company also remitted about Rs 9,754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment,’ the agency said.

‘The company has booked around Rs 944 crore in the name of advertisement and marketing expenses including the amount remitted to foreign jurisdiction,’ the ED alleged.

The Bengaluru-based company provides early learning, middle school education and test preparation, among others and Raveendran Bjyu co-founded the e-learning company with his wife Divya Gokulnath.

The company earlier this month reported narrowing of operational losses in core business to Rs 2,253 crore for 2021-22.