Embattled edtech major Byju’s, on November 29, claimed that the Enforcement Directorate's (ED) notice to the company is restricted to technical issues like late filing of annual reports and does not relate to any financial wrongdoing such as foreign exchange violations.
This comes after ED confirmed sending a show cause notice to edtech company's parent entity Think and Learn Private Limited and founder Byju Raveendran, in the FEMA violation case.
In the statement, Byju's further emphasised that the probe agency has not claimed any penalties for the 'technical' queries in its notice, and any fines that arise could be as little as a few thousand rupees.
“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 (Rs 7,500)...,” added the company in a statement shared on November 29.
To be sure, Byju’s, in the statement, confirmed receiving the ED notice days after vehemently denying possession of the same. "We are in receipt of the notice from the Enforcement Directorate which now definitively concludes their investigation...," said the company.
Byju's also said that no case has been made for violation of FDI rules by the ED. "The Company is advised 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," it added.
In an earlier statement on November 21, the law enforcement agencey said that Byju's and its founder Raveendran have contravened the provisions of FEMA by failing to submit documents of imports against advance remittances made outside India, realise proceeds of exports made outside India, and among other violations.
ED had also added that the complaint was filed by the ED with respect to the contraventions of the provisions of FEMA, 1999 to the tune of Rs 9,362.35 crore.
Byju's story so far
This development also follows fresh troubles for Byju's as the Board of Control for Cricket in India (BCCI) dragged the edtech firm to the National Company Law Tribunal.
The company has also come under fire recently for delaying 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.
This follows Byju's overcoming a longstanding issue with Davidson Kempner, linked with covenants on it'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.
The company has seen a series of top-level exits including its CEO Mrinal Mohit, CFO Ajay Goel and CTO Anil Goel, among others, who were later replaced.
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