Edtech platform Byju’s on Wednesday said that it will continue to maintain complete adherence to all Foreign Exchange Management Act (FEMA) regulations, while alleging ‘inadvertently exaggerated reporting in the media’, this days after being served a show cause notice by the Enforcement Directorate (ED).
On November 21, the central probe agency issued show cause notices to ed-tech company Byju’s founder, Byju Raveendran and the parent company, Think and Learn Pvt Ltd, over alleged violations by the company worth ₹9,362 crore under the foreign exchange law.
In its statement, the ED had alleged that Byju’s parent company and Raveendran contravened the provisions of FEMA by “failing to submit documents of imports against advance remittances made outside India, by failing to realise proceeds of exports made outside India, by delayed filing of documents against the Foreign Direct Investment (FDI) received into the company, by failing to file documents against the remittances made by the company outside India and by failing to allot shares against FDI received into the company.”
Responding to the notice, the ed-tech platform said that the queries that it received in the notice are ‘solely technical in nature’ such as delay in filing Annual Performance Reports (APRs) with respect to duly compliant ODI investments of close to (~) ₹8,000 crores that arose from the delayed statutory audit (FY22).
“The Company has however filed requisite intimation contemporaneously for all FDI which is received in accordance with the eligibility criteria in law and not affected by the alleged non filing of APR. The Company has also issued/allotted shares within the prescribed time against the FDI so received,” the statement added.
“This is being clarified to dispel any misgivings about wrong doing in relation to receipt of FDI or allotment of shares. The Company is advised that the delayed filing of APR (particularly when returns in relation to receipt of FDI have been filed in time) is a technical issue and the Company is confident of successfully dealing with the case. Based on precedent actions by the Adjudicating Authority, we anticipate that the fines, if any, will be nominal. To cite an example, the Late Submission Fee for such reporting delays that can be imposed pursuant to the RBI regulations with respect to APRs is very nominal ( ₹7500) and by no means does the notice denote a fine,” the platform added.
Byju’s claimed that the ED notice does not specify any quantum of fine but rather highlights the quantum of FDI/ODI (~ 9,000 crore) along with the deadlines that the company says it missed in the reference period for this quantum.
In April this year, the ED had raided three premises linked to the company over alleged FEMA violations. The agency had said that the searches revealed that Byju’s parent company Think and Learn Pvt Ltd received foreign direct investment of around ₹28,000 crore from 2011 to 2023. The company remitted ₹9,754 crore to various foreign jurisdictions in the same period in the name of overseas direct investment, it claimed.