The Enforcement Directorate (ED) has issued a fresh notice to Byju Raveendran, the founder and CEO of Byju’s, the online education platform, asking him not to leave India without its permission. The notice comes in the wake of an ongoing investigation by the ED into alleged violations of the Foreign Exchange Management Act (FEMA) by Think & Learn Private Limited, the parent company of Byju’s, and Raveendran.
ED’s allegations against Byju’s and Raveendran
According to the ED, Think & Learn Private Limited and Raveendran have contravened the provisions of FEMA to the tune of Rs 9,362.35 crore by receiving foreign direct investment (FDI) from foreign entities without obtaining the prior approval of the Reserve Bank of India (RBI).
The ED also alleged that Think & Learn Private Limited and Raveendran have failed to comply with the reporting requirements under FEMA and have not furnished the required documents and information to the ED despite repeated requests.
The ED had issued showcause notices to Think & Learn Private Limited and Raveendran in November 2020, asking them to explain why adjudication proceedings should not be initiated against them for the alleged FEMA violations. However, the ED claimed that the responses given by them were not satisfactory and did not address the issues raised by the ED.
“The respondents have failed to provide documentation proving that the foreign direct investment (FDI) was compliant, nor have they been able to defend their acceptance of FDI from foreign entities. with the FEMA regulations. The respondents have also not submitted the relevant contracts, agreements, invoices, and other documents pertaining to the FDI transactions. The respondents have also not cooperated with the investigation and have evaded the queries of the ED,” the ED said in its notice.
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Byju’s and Raveendran’s response to ED’s notice
Byju’s and Raveendran have denied any wrongdoing and have challenged the ED’s notice in the Delhi High Court. They have contended that the FDI received by them was in accordance with the FEMA regulations and that they have submitted all the relevant documents and information to the ED.
They have also argued that the ED’s notice is arbitrary, illegal, and violative of their fundamental rights. They have sought the quashing of the ED’s notice and the grant of interim relief to Raveendran to allow him to travel abroad for his business purposes.
“We have not violated any FEMA rules and we have complied with all the reporting requirements under FEMA. We have provided all the necessary documents and information to the ED and we have nothing to hide. The ED’s notice is based on false and baseless allegations and is an attempt to harass and intimidate us. We have full faith in the judiciary and we are confident that we will get justice,” Byju’s and Raveendran said in a statement.
The Delhi High Court has issued a notice to the ED and sought its response on the petition filed by Byju’s and Raveendran. The court has also directed the ED not to take any coercive action against Raveendran till the next date of hearing.
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Byju’s and Raveendran’s background and achievements
Byju’s is one of the leading online education platforms in India, offering courses and programs for students from kindergarten to post-graduation. The company claims to have over 100 million registered users and 6.5 million paid subscribers on its app.
Raveendran, a former teacher and engineer, founded Byju’s in 2011 with the vision of making learning fun and engaging for students. He is also the chief mentor and instructor of the company, creating and delivering the video lessons on the app.
Byju’s has raised over $2 billion from various investors, including Naspers, Tencent, Tiger Global, General Atlantic, and Chan Zuckerberg Initiative. The company is valued at over $16 billion, making it one of the most valuable startups in India and the world. Raveendran is also one of the youngest billionaires in India, with a net worth of over $3 billion.
Byju’s has also acquired several other edtech companies, such as WhiteHat Jr, Aakash Educational Services, Great Learning, and Toppr, to expand its offerings and reach. The company has also partnered with Disney, Google, and Microsoft to enhance its content and technology.
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