Byju's responds to allegations of FEMA violations as ED issues Rs 9,000 crore notice
By Vinaykumar Patil | First Published Nov 21, 2023, 4:05 PM ISTByju's faces allegations of FEMA violations, with an ED notice demanding Rs 9,000 crore for alleged breaches. The company refutes claims, denying receipt of any notice. Amidst massive foreign investments and remittances, concerns arise over potential FEMA infractions. Founded in 2011, Byju's became a top education platform, despite recent financial challenges impacting its trajectory.
Byju’s, the prominent education technology company, finds itself under the spotlight due to allegations surrounding Foreign Exchange Management Act (FEMA) violations and a notice issued by the Enforcement Directorate (ED) to pay a staggering Rs 9,000 crore. Reports of the ED's notice demanding the sum for purportedly breaching foreign financial policies have triggered significant attention and concern.
The allegations stem from claims that Byju's, known for its digital teaching methods that have streamlined education for students, received a notice from the ED for violating foreign financial policies. However, the company swiftly responded, asserting that it had not received any such notice from the investigating agency.
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According to reports, Byju has received a substantial foreign direct investment totalling Rs 28,000 crore between 2011 and 2023. During this period, an amount of 9,754 crores was allegedly transferred to foreign nations under the guise of foreign investment. These transactions have raised concerns regarding potential violations of FEMA regulations related to foreign investment and remittance.
Byju addressed the situation in a statement, refuting claims of FEMA violation and dismissing the circulating penalty payment notice as untrue. The company emphasized that it has not been officially notified or served any such notice by the authorities or investigative agencies.
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Founded by Baiju Ravindran and Divya Gokulnath in 2011, Byju ventured into online education and launched Byju's Learning App in 2015, followed by the Math app. By 2018, it became the largest education company, amassing 1.5 crore users.
The company expanded its learning apps globally and heavily invested in marketing, including sponsorships in events like FIFA football and significant spending in India, witnessing a surge in revenue during the pandemic. However, this rapid growth was accompanied by financial losses, leading to difficulties for Byju in 2021, with subsequent challenges continuing to impact the company's trajectory.
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