Enforcement Directorate raids BYJU’s over alleged FEMA violations

It said the action was taken on the basis of "various complaints" received by private people and alleged that Raveendran Byju was issued "several" summons but he remained "evasive and never appeared" before the ED.

The searches found that his company, Think & Learn Pvt. Ltd., received foreign direct investment (FDI) to the tune of about Rs 28,000 crore during 2011-2023.

"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.

A spokesperson told CNBC-TV18 that, “The recent visit by officials from the Enforcement Directorate (ED) to one of our offices in Bangalore was related to a routine inquiry under FEMA.”

The company added, “We have been completely transparent with the authorities and have provided them with all the information they have requested. 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.

We want to emphasise that it is business as usual at BYJU'S.”

CNBC-TV18 had reported earlier in April that BYJU’s is working to to raise $250 to $500 million in funding at a flat valuation of $22 billion, amid pressure to put a lid on rising costs, turn profitable and repay its $1.2 billion term loan.

The funding that was to be closed in April is still not finalised and BYJU’s has not responded on a new timeline or answered CNBC-TV18’s questions on the size and timing of this funding.

CNBC-TV18 also learnt from company sources that the round would not be a “down round”. indicating that valuations will hold even though there are significant headwinds facing the company and the sector.

The company boasts a marquee roster of over 70 investors. From the Chan- Zuckerberg Initiative to Sequoia Capital India, General Atlantic, BOND, Silverlake, Blackrock, Verlinvest, Naspers, Tencent, CPPIB, Tiger Global, Qatar Investment Authority and Lightspeed Ventures amongst others. These investors have pumped almost $6 billion into BYJU’S.

Remember, according to multiple reports BYJU’S was seeking to refinance its $1.2 billion loan at a higher rate, a development linked to the delays in publishing FY21 and FY22 results, which led lenders to recall the loans. The company refused to comment on the loan claiming, “The $1.2 billion loan matures in 2026 and we have a healthy cash flow to be able to meet all our interest obligations in a timely manner.”

The firm which has about a billion dollars in cash, claims it will turn net cash positive with this round, a source told CNBC-TV18.

The probe by ED could put a spanner in the works for the company as it works to take Aakash Educational Services public in the next 12 months. The company has received board approval and is in the process of finalising bankers for the public offer.