The Enforcement Directorate (ED), a financial crime-fighting agency, said Saturday it conducted searches at three of edtech company Byju's premises in Bengaluru to investigate possible violations of India’s anti-money laundering law.
The ED said in a statement it seized various “incriminating documents and digital data” during the search, conducted under the provisions of the Foreign Exchange Management Act (FEMA), the anti-money laundering law.
The agency said it started the investigation against Byju's on the basis of “various complaints received from various private persons”. It didn’t identify the people who filed the complaints.
It also said that, during the investigation, “several summonses” were issued to Byju’s founder and CEO Byju Raveendran. “However, he always remained evasive and never appeared during the investigation,” the ED said.
The ED said that FEMA searches revealed that Byju’s received foreign direct investment of about Rs 28,000 crore from 2011 to 2023 and remitted Rs 9,754 crore to various foreign jurisdictions as overseas direct investment.
The agency said Byju’s hasn't prepared its financial statements since the financial year 2020-21 and hasn't got its accounts audited. “Hence, the genuineness of the figures provided by the company are being cross examined from the banks,” the ED said.
A spokesperson for Byju's legal team said the searches were related to a “routine inquiry” under FEMA.
“We have been completely transparent with the authorities and have provided them with all the information they have requested. We have nothing but the utmost confidence in the integrity of our operations, and we are committed to upholding the highest standards of compliance and ethics,” the spokesperson said.
"We will continue to work closely with the authorities to ensure that they have all the information they need, and we are confident that this matter will be resolved in a timely and satisfactory manner,” the spokesperson said. “We want to emphasize that it is business as usual at Byju’s."
The ED investigation compounds problems for Byju’s, which has been under pressure for the past several months to cut costs, repay loans and file its annual financial statements with the regulators.
Byju’s has raised billions of dollars in the past few years. Its usage surged during the Covid-19 pandemic that forced schools and colleges to shut physical classes and prompted students to sign up for online learning programmes.
The company counts Sequoia Capital, General Atlantic, Lightspeed Venture Partners, Qatar Investment Authority, Owl Ventures, Canada Pension Plan Investment Board, Tiger Global, Tencent, Verlinvest, Sofina, BlackRock and T.Rowe as its investors.
Earlier this month, the company reportedly raised $700 million in a funding round led by two West Asia-based sovereign wealth funds and large private equity firms. A few existing investors also participated in the round.
The company is reportedly in talks with Abu Dhabi’s fund 10X AD for investment in its parent entity Think and Learn Pvt. Ltd or its offline tutor arm Aakash Education Services.
The fundraising comes as a breather for the company which has been working around repayments of a large $1.2-billion term loan that it secured in November 2021.
However, at least two of its investors – BlackRock and T Rowe Price – have marked down its valuation. BlackRock, the world's largest asset manager, recently valued Byju’s around $11 billion while T Rowe slashed its estimate of the company’s valuation to less than $10 billion.