The Enforcement Directorate (ED) has reportedly issued a notice to edtech giant Byju’s, demanding a payment of Rs 9,000 crore for allegedly violating foreign funding laws. However, Byju’s has denied receiving any such communication from the authorities.
According to sources within the ED, Byju’s received foreign direct investment (FDI) totaling around Rs 28,000 crore between the years 2011 and 2023. During the same period, it is alleged that the company transferred approximately Rs 9,754 crore to foreign jurisdictions under the guise of overseas direct investment.
Byju’s has taken to its official social media handle to refute these claims. The company stated that it has not received any communication regarding these allegations and categorically denies any violation of the Foreign Exchange Management Act (FEMA).
This notice from the ED marks the latest development in the downfall of what was once India’s most valuable startup. Byju’s parent company, Think and Learn Private Limited, was established by engineers and teachers Byju Raveendran and Divya Gokulnath in 2011. Initially, they offered online learning programs for competitive exams.
In 2015, Byju’s launched its learning app, which kickstarted its rapid growth. Over the years, they also introduced a math app for children and an app for parents to track their kids’ progress. By 2018, Byju’s had amassed over 1.5 crore users, reaching millions of households in small cities and rural areas. The app’s popularity surged during the Covid-19 pandemic when schools were closed, and students had to rely on digital education.
However, the company began facing setbacks after reporting significant losses in 2021, which led to a decline in its value. Subsequently, it attracted the attention of law enforcement agencies.
Byju’s has also faced serious allegations regarding its practices. Parents have accused the company of pressuring them into purchasing expensive courses and then reneging on their promises. The edtech major has also been accused of mistreating its employees and has made headlines for laying off thousands of staff members in an attempt to reduce costs.
Earlier this year, the ED conducted a raid on Byju’s office in Bengaluru due to suspicions of violating laws related to foreign funding.
The company has also encountered legal troubles abroad, as lenders filed a lawsuit in a US court, alleging that Byju’s defaulted on payments and breached loan agreements. In response, Byju’s sued the lenders, accusing them of harassment.
The situation continues to unfold, and the response from Byju’s regarding the ED’s notice is awaited.