Here's Why Edtech Unicorn Byju's Has Come Under ED Scanner On Saturday Enforcement Directorate (ED) revealed that it had conducted searches at the premises linked to the edtech major's parent entity, Think & Learn
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Despite being one of the most-valued edtech unicorns of India, Byju's has run afoul of India's prime economic intelligence agency Enforcement Directorate (ED)
The Directorate of Enforcement said in a statement that it had searched two company premises as well as CEO Byju Raveendran's residential premises in Bengaluru for allegedly running abroad over 9,700 crore of the INR 28,000 crore it received as Foreign Direct Investment (FDI) since 2011. The ED carried out searches at the premises of a Bengaluru firm linked to the edtech giant on April 29, 2023.
On Saturday ED revealed that it had conducted searches at the premises linked to the edtech major's parent entity, Think & Learn. According to an ED statement, "During the search, various incriminating documents and digital data were seized."
The statement further striked many claims that Byju's founder and CEO, Byju Raveendran remained evasive and never appeared during investigations despite several summons. The ED further revealed that the numbers shared by the edtech company didn't seem genuine, so they were being 'cross-examined from the banks' as the company's transaction history has not been audited since March 2021.
After the raid, in an internal letter to the employees, Byju Raveendran had said that, "Byju's has taken all efforts to fully comply with all applicable foreign exchange laws and all our cross-border transactions have been duly vetted by both its professional advisors or counsel of the investment funds and other sophisticated counterparties."
According to recent media reports, the ED raid is likely to impact the company's fundraising plans and the initial public offering of its subsidiary, Aakash Educational Services. It is also reported that the investors may seek explanations regarding the ED investigation from the company.
As per available sources, the edtech major is stumbling from one crisis to another. Adding another leaf to the already listed troubles, the edtech firm Byju's and Bollywood star Shah Rukh Khan had been asked to compensate an IAS aspirant for alleged fraudulent behavior and unfair trade practice. The order was reportedly issued by the District Consumer Disputes Redressal Commission of Indore.
The list got elongated as in last month its $22 billion valuation was under pressure after big-name investors like BlackRock marked it down in their private assessments. BlackRock has reportedly been marking down the valuation of Byju's since June last year.