FEMA probe: ED issues lookout notice against Byju’s Founder Raveendran

The Enforcement Directorate (ED) has renewed the Lookout Circular (LOC) against Byju Raveendran, the founder of Byju’s, as part of its probe under the Foreign Exchange Management Act (FEMA). The LOC, issued over a year ago, is a measure taken at the entry and exit points of the country.

The ED alleges that Think and Learn Pvt Ltd, the company operating Byju’s, violated India’s foreign exchange law and caused losses to the exchequer amounting to ₹9,362 crore. The violations include failure to submit documents of imports against advance remittances made outside India, failure to realize proceeds of exports made outside India, delayed filing of documents against Foreign Direct Investment (FDI), failure to file documents against remittances made outside India, and failure to allot shares against FDI.

Show Cause Notices and Adjudicating Authority:

The adjudicating authority under FEMA issued show cause notices to Think and Learn Pvt Ltd and Byju Raveendran based on the ED’s complaint. The notices were issued under section 16 of FEMA, and the alleged contraventions amount to ₹9,362.35 crore.

The ED’s probe is based on various complaints related to foreign investment received by Byju’s and its business practices. The company is accused of making significant foreign remittances and investments abroad, allegedly contravening FEMA provisions and causing a loss of revenue to the Indian government.

Following searches on Byju’s in April 2023, the ED claimed that the company received foreign direct investment of around ₹28,000 crore from 2011 to 2023. Byju’s allegedly remitted ₹9,754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment.

The ED has requested the Bureau of Immigration (BOI) to issue a fresh Lookout Circular against Byju Raveendran to prevent him from leaving the country. The LOC is aimed at ensuring the presence of Raveendran during the ongoing FEMA probe.

Byju’s, founded in 2011, gained significant popularity, especially during the Covid-19 pandemic. 

The edtech company also owns Aakash Educational Services, offering courses for medical and engineering entrance exams. The renewed LOC indicates continued legal scrutiny and challenges for Byju’s and its founder.