Explained: What is lookout circular issued by ED for Byju's co-founder Byju Raveendran?
The probe centers around alleged violations of the Foreign Exchange Management Act, 1999 (FEMA), pertaining to a substantial remittance of Rs 9362.35 crore by Byju’s, suspected to have caused a loss to the exchequer.
FollowThe founder and CEO of edtech giant Byju’s, Raveendran, find himself in the Enforcement Directorate's (ED) crosshairs as the agency issued a look-out circular (LOC) last month. This circular, aimed at Raveendran, mandates the Bureau of Immigration to notify the ED of any attempt by him to travel outside India.
The probe centers around alleged violations of the Foreign Exchange Management Act, 1999 (FEMA), pertaining to a substantial remittance of Rs 9362.35 crore by Byju’s, suspected to have caused a loss to the exchequer.
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The ED's Bengaluru zonal office initiated the issuance of the LOC after corresponding with the Bureau of Immigration, flagging concerns over potential foreign travels by Raveendran. The scrutiny into Byju’s and its parent company, Think & Learn Private Limited, began with raids on three premises, including Raveendran's residence, in April of the previous year.
The ED contends that Raveendran remained elusive despite numerous summonses related to the probe based on complaints about FEMA norm violations.
Byju's faces allegations of not presenting an audited financial statement for the fiscal year 2020-21. Additionally, the ED asserts that the company attracted approximately Rs 28,000 crore in foreign direct investment (FDI) from 2011 to 2023. Simultaneously, it remitted about Rs 9,754 crore under the guise of overseas direct investment.
The central agency further scrutinizes the edtech firm's expenditure, highlighting an advertising and marketing spend of around Rs 944 crore, some of which was directed to foreign countries.
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In November last year, the ED served a show-cause notice to Raveendran and Byju’s, concluding that they violated FEMA norms. The notice emphasized the company's failure to submit documents showcasing imports against advance remittances made outside India and its inability to allot shares against the fundings received as FDI.
As the investigation unfolds, Raveendran remains under the ED's watchful eye, subject to the LOC restricting his international travel.
