The Enforcement Directorate has issued show-cause notices to Byju's parent company and founder, Byju Raveendran, alleging violations worth over Rs 9,300 crore under the Foreign Exchange Management Act, 1999.
The investigative agency said it initiated an investigation on the basis of various complaints regarding the foreign investment received by the company and its business conduct.
"The company was also stated to have made significant foreign remittances outside India and investments abroad, which were allegedly in contravention of provisions of FEMA, 1999, and caused loss of revenue to the government of India," it said in a press release.
Based on the information, the ED conducted searches at the premises of Think and Learn Pvt. and Raveendran's residence in Bengaluru in April this year and seized documents pertaining to investments received by Byju's. It also interviewed Raveendran and the then-Chief Financial Officer, Ajay Goel.
The ED said its investigation concluded that Byju's contravened the provisions of FEMA by:
Failing to submit documents of imports against advance remittances made outside India
Failing to realise the proceeds of exports made outside India.
Delayed filing of documents against the foreign direct investment received into the company.
Failing to file documents against the remittances made by the company outside India
Failing to allot shares against FDI received into the company
The showcause notices are the latest among headwinds for the beleaguered edtech startup. It is still in the middle of a battle with lenders over $1.2 billion debt and in talks to sell its subsidiaries—Great Learning and Epic!—to raise funds to settle the amount.
It also posted an Ebitda loss of over Rs 2,250 crore for its standalone business, even as revenue grew to over Rs 3,500 crore for FY22. It is yet to file its financials with the Ministry of Corporate Affairs, despite releasing a statement on its earnings about two weeks ago.
Its auditor Deloitte and three key investor representatives resigned from the board, while Chief Business Officer Pratyusha Agarwal; Mukut Deepak, business head for Byju's Class 4–10 school segment; and Himanshu Bajaj, head of Byju's Tuition Centres business also exited.
Other headwinds included valuation cuts by prominent investors, mass layoffs, and unhappy employees taking to social media routinely.
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