Byju Raveendran’s Lookout Notice Renewed Amidst ED’s FEMA Probe Request

The Enforcement Directorate (ED) has reportedly extended its lookout circular (LOC) against Byju Raveendran, the founder of Byju’s, in connection with an investigation into alleged violations of the Foreign Exchange Management Act (FEMA) by the ed-tech company. Sources familiar with the matter revealed that the LOC, which is issued at the country’s entry and exit points, was initially issued over a year ago when the federal agency commenced its probe.

According to officials, the LOC was renewed earlier this month with a stipulation that the ED must be notified if Raveendran leaves the country. It has been indicated that Raveendran is currently residing outside of India based on information available to the agency.

The financial crimes investigation agency has accused Think and Learn Pvt Ltd (the entity behind Byju’s) of violating India’s foreign exchange regulations and causing losses to the exchequer amounting to approximately ₹9,362 crore. The ED alleged that Think and Learn Pvt Ltd and Byju Raveendran breached FEMA provisions by failing to comply with various requirements such as submitting documents for imports against advance remittances made abroad, realizing proceeds of exports made abroad, and timely filing of documents related to foreign direct investment (FDI) received by the company.

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In November 2023, the ED issued show cause notices to Think and Learn Pvt Ltd and Byju Raveendran based on a complaint filed by the agency under FEMA, 1999. The notices were related to contraventions amounting to ₹9,362.35 crore, as stated by the agency.

The ED’s investigation stems from multiple complaints concerning foreign investments received by Byju and its business practices. The agency noted that the company allegedly made substantial foreign remittances and investments abroad, purportedly in violation of FEMA provisions, resulting in revenue loss for the Indian government.

Following raids on the company in April 2023, the ED claimed that its searches revealed Byju had received foreign direct investment totaling around ₹28,000 crore from 2011 to 2023. Additionally, the company allegedly remitted ₹9,754 crore to various foreign jurisdictions during the same period in the guise of overseas direct investment.

Established in 2011, Byju’s, a coaching firm, experienced significant growth during the Covid-19 pandemic. It also owns Aakash Educational Services, offering courses for medical and engineering entrance exams.