India's financial crime-fighting agency said on Saturday it had conducted searches at the premises of Byju Raveendran, CEO of Bengaluru-based ed-tech firm Byju's, for allegedly violating foreign funding laws, according to local media.
Two businesses and one residential premise in Bengaluru were searched by the probe agency in connection with a case against Raveendran and his company 'Think & Learn Private Limited' under the provisions of the Foreign Exchange Management Act (FEMA).
The Enforcement Directorate (ED) said several incriminating documents and data were seized during the search.
Byju's responded minutes after the probe agency's revelation, claiming the searches were related to a "routine inquiry" under FEMA.
"We have been completely transparent with the authorities and have provided them with all the information they have requested. We have nothing but the utmost confidence in the integrity of our operations, and we are committed to upholding the highest standards of compliance and ethics," the company told NDTV, adding that "it is business as usual at Byju's".
Byju's is one of India's biggest startups, once valued at $22 billion. It has attracted global investors such as General Atlantic, BlackRock and Sequoia Capital, which have invested in the company over the years.
The searches under alleged foreign exchange law violations revealed that Think and Learn Private Limited, Byju's parent firm, had received a foreign direct investment of nearly 280 billion rupees ($3.43 billion) during the period from 2011 to 2023, ED said.
Byju's legal spokesperson said the visit by ED officials to one of the company's offices in Bengaluru was related to a routine inquiry under foreign exchange laws.
"We will continue to work closely with the authorities to ensure that they have all the information they need, and we are confident that this matter will be resolved in a timely and satisfactory manner," the spokesperson said.
The searches come at a time when Indian startups have struggled to raise funds and have been questioned by investors over their high valuations.
The platform saw its usage swell during the pandemic but announced the layoff of 2,500 of its 50,000 employees as educational institutions resumed in-person classes. The company reported a loss of 45.64 billion rupees ($558.49 million) in May for fiscal 2021.
Byju's spent $2.5 billion in the fiscal year that ended March 2022 to acquire companies such as Aakash, U.S.-based Epic, kids' coding platform Tynker, professional education firm Great Learning and exam perpetration platform Toppr.
New York-based investment firm BlackRock in a private assessment last month slashed its valuation of Byju's by almost half to $11.15 billion.
The statement issued by the agency said the company also remitted 97.5 billion rupees to various foreign jurisdictions between 2011 and 2023 in the name of overseas direct investments.
ED said Think and Learn had not prepared its financial statements since the financial year 2020-21, nor had its accounts been audited.
Byju's spokesperson said the company had provided authorities with all the information they requested.
"We have nothing but the utmost confidence in the integrity of our operations," the spokesperson added.
