Byju Raveendran, the founder and chief executive officer of embattled edtech firm Byju's told shareholders that a recent due diligence effort found the company in complete compliance with FEMA.
This comes hours after reports emerged that India's Enforcement Directorate has issued a show-cause notice to the company for alleged violations of the act.
“We want to assure you that BYJU'S has always been fully compliant with FEMA regulations,” said Raveendran, in a note sent to shareholders.
Moneycontrol has a copy of the letter.
The reports that triggered the letter said that the notice was sent to the parent company Think and Learn Pvt Ltd (TLPL) and founder Raveendran relating to a Rs 9,000 cr violation of the act. The company issued a swift denial following the news saying it has not received any notice from the Enforcement Directorate.
In the copy of the letter Moneycontrol sourced, Byju’s chief claimed that the report is based on “hearsay and lacks any factual basis.” “As of today, BYJU'S has not received any such notice, as mentioned in the article,” he added.
Raveendran also mentioned that a trusted law firm conducted a comprehensive due diligence exercise and claimed that it found no FEMA violations.
Earlier in April, ED searched three premises in Bengaluru in the case involving Raveendran and his company under the provisions of FEMA. At that time, the ED asserted that it had seized various incriminating documents and digital data.
The ED did not comment on the development at the time of publishing the story.
During the searches in April, ED also revealed that the company has received foreign direct investment to the tune of approximately Rs 28,000 crore during the period from 2011 to 2023.
In addition, the company also remitted about Rs 9,754 crore to various foreign jurisdictions during the same period in the name of overseas direct investment, ED alleged.
Raveendran, in the letter, said that the company has maintained a “cooperative stance” with the ED throughout their inquiries. “We have satisfactorily answered all their queries, both verbally and on record,” he added.
Byju’s story so far
This development at Byju’s comes even as the company delayed full and final settlements of laid-off employees yet again. The Bengaluru-based company had earlier shifted the date of payment from September to November.
Recently, the company overcame a longstanding issue with Davidson Kempner, linked with covenants on Byju’s’ subsidiary Aakash. Earlier in November, Manipal Group chairman Ranjan Pai bought out the debt investment by the US Hedge Fund, in a Rs 1,400-crore deal, Moneycontrol reported.
Meanwhile in September, Byju's also submitted a proposal to its lenders, in which the company expressed its intention to fully repay its $1.2 billion term loan B within the upcoming six months. Byju's aims to achieve this by making an initial payment of $300 million within the next three months.
As part of its efforts to secure the necessary funds for loan repayment, the company has also decided to undertake a strategic review of its key assets.
For this, Byju’s has put upskilling platform Great Learning and book reading platform Epic, up for sale, which would yield the company about $1 billion, Moneycontrol reported.
Byju’s, founded over a decade back by former teacher Raveendran, had soared to new heights in March 2022 after it raised a massive $800 million funding round, at a $22 billion valuation, becoming India’s most-valued startup.
But the company has come under fire since then for a host of issues including delayed financial results, the resignation of its auditor, Deloitte, and three key board members–Peak XV Partners (Sequoia Capital India)’s GV Ravishankar, Prosus’ Russel Dreisenstock and Chan Zuckerberg Initiative’s Vivian Wu.
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