India’s financial crime-fighting agency issues notice to Byju’s

BENGALURU (Reuters) -India’s federal financial crime-fighting agency has issued a show-cause notice to education tech company Byju’s for alleged violations of foreign exchange rules, the agency said in a statement on Tuesday.

The agency alleged violations by the company worth over 93 billion Indian rupees ($1.12 billion) under the Foreign Exchange Management Act (FEMA), and has sent notices to founder Byju Raveendran and parent company Think & Learn Pvt Ltd.

Byju’s violated FEMA norms by not submitting documents of imports against advance remittances made outside India, and failing to realize proceeds of exports, the Enforcement Directorate said.

The company also delayed filing of documents against the foreign investment received and failed to allot shares against these, it added.

Byju’s did not immediately respond to a request for comment on the Enforcement Directorate’s statement but, earlier on Tuesday, it denied it had received any notice from the agency.

“Byju’s unequivocally denies media reports that insinuate it has received a notice from the Enforcement Directorate. The company has not received any such communication from the Enforcement Directorate,” the company said in a statement.

In April, the Enforcement Directorate raided three premises linked to Byju’s over alleged FEMA violations, revealing a reception of nearly 280 billion rupees in foreign direct investment from 2011 to 2013.

At the time, CEO Raveendran had iterated the company’s compliance with foreign exchange laws in an internal memo, Reuters had reported.

The reported allegations come amid a string of setbacks for the company, including investors cutting its valuation and its auditor and board members quitting.

It has also been negotiating the repayment of a $1.2 billion loan in the last few months.

Backed by investors such as General Atlantic, Prosus, and Blackrock, Byju’s reported its fiscal 2021-22 results earlier this month after a year-long delay.

($1 = 83.2440 Indian rupees)

(Reporting by Varun Vyas in Bengaluru; Editing by Nivedita Bhattacharjee, William Maclean and Bernadette Baum)