ED upgrades look-out notice against BYJU’s founder Byju Raveendran

Indian Express reported that the agency has issued a fresh request to the immigration department. The lookout circular against Byju Raveendran is part of its Foreign Exchange Management Act (FEMA) probe against the ed-tech firm.

The LC against Raveendran

The ED has asked the Bureau of Immigration to upgrade the LC against Raveendran so that he is not allowed to go abroad from any Indian land, air or land port before the investigating officer (IO) of the case is informed.

Under the new LC, it will be the decision of the IO to either totally stop his foreign travel or allow him to do so after asking some questions and getting assurances, the sources said.

The LC in operation till now against Raveendran only stipulated the immigration authorities to inform the ED about his entry and exit from the country. The agency, in November last year, had slapped a foreign exchange violation show cause notice of more than ₹9,300 crore against BYJU’s and Raveendran.

The federal probe agency spelt out multiple grounds for charging the ed-tech company and its chief promoter including charges of “failing” to submit documents of imports against advance remittances made outside India; failing to realise proceeds of exports made outside India by delayed filing of documents against the Foreign Direct Investment (FDI) received into the company, among others.

Also Read: Karnataka High Court refuses to stay BYJU’S EGM on February 23

Karnataka HC order

On Wednesday, Karnataka High Court refused to stay an emergency shareholder meeting called by select investors of Think and Learn Pvt Ltd — the owner of BYJU’s — to oust the company’s Founder and CEO Byju Raveendran and his family from the leadership in the edtech firm.

BYJU’s had approached the high court seeking a stay on the EGM but the court only gave an interim relief that any resolution passed at the EGM on 23 February, could not be implemented before the next court hearing.

Meanwhile, BYJU’s top official said the company’s $200 million rights issue has been fully subscribed and asked all shareholders to participate in the “renewed mission”.

Think and Learn Private Limited, which operates under Byju’s brand name, has floated a $200 million rights issue at less than 99 percent enterprise valuation compared to its peak valuation of $22 billion.

BYJU’s CEO has offered to restructure the Board and appoint two non-executive directors to the Board by the mutual consent of the founder and shareholders after the audit of financial year 2023 is complete by March-end.

Related: BYJU’S $200 million rights issue fully subscribed

The case

The probe agency has accused Think and Learn Pvt Ltd, the company operating BYJU’s, of violating India’s foreign exchange law. The agency alleges that this violation has resulted in significant losses to the exchequer, estimating the funds involved to be as high as ₹9,362 crore.

As per the statement by the ED in April 2023 following raids on the premises of BYJU’s, various incriminating documents and digital data were seized during the raids.

“FEMA searches also revealed that the company received foreign direct investment to the tune of ₹28,000 crore (approx.) from 2011 to 2023. Further, the company also remitted ₹9,754 crore (approx.) to various foreign jurisdictions during the same period in the name of overseas direct investment,” the ED said in a statement.

It added that the company booked around ₹944 crore in the name of advertisement and marketing expenses including the amount remitted to foreign jurisdiction.

“The company has not prepared its financial statements since Financial Year 2020-21, and has not got the accounts audited, which is mandatory. Hence, the genuineness of the figures provided by the company is being cross-examined by banks,” stated the ED.