New Delhi : India’s federal anti-money laundering agency, the Enforcement Directorate (ED), conducted searches at three premises of edtech startup BYJU’s in the country’s information technology capital Bengaluru on Saturday. However, the ED searches and seizures did not send any shockwaves through the startup sector. BYJU's termed these searches as 'routine' but the agency said incriminating documents were seized.
However, the ED in a statement said that the founder and CEO of the edtech company – Raveendran Byju – was evasive and never appeared before its officials in response to a summons sent to him to join the investigation. In light of this, the spotlight has turned on its powers to conduct searches and seizures under the FEMA law.
The edtech startup founded by Raveendran Byju was already under public scrutiny following complaints by users and employees besides several other reasons. Moreover, the edtech platform, which received approximately Rs 28,000 crores in overseas funding since its inception and was the face of India’s shining tech talent, drew criticism for unfair corporate practices including non-compliance of its audited financial results as mandated under the Companies Act.
Amidst this, the ED said it conducted searches on Saturday at three places in Bengaluru in the case of Raveendran Byju and his company ‘Think & Learn Private Limited’ (Byju online learning platform) under the provisions of FEMA. During the search, various incriminating documents and digital data were seized.
According to the ED, its searches under the Foreign Exchange and Management Act of 199 (FEMA) revealed that the company had received foreign direct investment (FDI) to the tune of Rs 28,000 crore between 2011 to 2023 and had remitted nearly Rs 9,754 crore abroad as an overseas direct investment (ODI). Moreover, what attracted the attention of the enforcement officials was the fact the company had booked Rs 944 crore in the name of marketing and advertising expenses which included payments made to entities based outside India.
ED’s powers of search and seizure under FEMA