ED Renews Lookout Notice for Founder of Byju's

The Enforcement Directorate (ED) has intensified its pursuit of Byju Raveendran, the founder of Byju's, as it presses forward with investigations into alleged violations of the Foreign Exchange Management Act (FEMA) totaling ₹9,362 crore.

In response to the ED's complaint, the Adjudicating Authority under FEMA previously issued show cause notices to Think & Learn Private Limited, the operating entity behind Byju's, and its founder, Byju Raveendran. These notices stem from allegations concerning the company's receipt of foreign investment, significant foreign remittances, and overseas investments purportedly made in contravention of FEMA regulations, which the ED asserts have resulted in losses to the national exchequer.

The investigative process initiated by the ED commenced with the examination of foreign investment inflows, substantial foreign remittances, and offshore investments allegedly conducted by Byju's. In April, acting on this intelligence, the agency conducted raids at various locations in Bangalore associated with Think & Learn Private Limited, as well as at Mr. Raveendran's residence, collecting pertinent documents and recording statements from key individuals, including the company's chief financial officer.

According to ED findings, Byju's and Mr. Raveendran stand accused of several FEMA violations, including failure to furnish documentation for imports against advance remittances made abroad, failure to realize proceeds from exports conducted overseas, delayed submission of documents related to Foreign Direct Investment (FDI) received by the company, failure to submit documentation for remittances made outside India, and failure to issue shares corresponding to FDI receipts.

The ED alleges that Byju's received approximately ₹28,000 crore in FDI between 2011 and 2023, while also remitting approximately ₹9,754 crore to various foreign jurisdictions during the same period under the guise of overseas direct investment.

In response to these accusations, the ED has taken proactive measures, urging the Bureau of Immigration to issue a lookout notice against Byju Raveendran. This move signifies the ED's commitment to preventing Mr. Raveendran from leaving the country as investigations continue.

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The ongoing scrutiny surrounding Byju's underscores the challenges facing the Indian edutech giant, both domestically and internationally. As the investigation progresses, authorities remain vigilant in their efforts to uphold regulatory compliance and safeguard the integrity of the country's financial system.

The developments surrounding Byju's and its founder highlight the complexities and potential pitfalls associated with navigating the regulatory landscape, particularly in sectors marked by rapid growth and significant foreign investment inflows. As the saga unfolds, stakeholders closely monitor the evolving situation, awaiting further updates on the outcome of the ED's investigations into these alleged FEMA violations.