Manas Dasgupta
NEW DELHI, Apr 29: The app-based online tutorial institution BYJU’s is facing a host of investigations for the alleged violation of the provisions of the Foreign Exchange Management Act (FEMA) as well as for alleged malpractices to lure parents and children to buy their courses.
The Enforcement Directorate on Saturday conducted searches at the premises of Byju Raveendran, CEO of Bengaluru-based ed-tech firm BYJU’s, for allegedly violating foreign funding laws. Two business and one residential premises 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 FEMA.
Top child rights body National Commission for Protection of Child Rights (NCPCR) has also summoned education technology platform BYJU’s CEO over allegations that it was indulging in malpractices to lure parents and children to buy their courses. According to reports, BYJU’s is facing a range of complaints on social media platforms and consumer websites with customers alleging that they were exploited and deceived as they had to put their savings and futures in jeopardy. The NCPCR, taking cognisance of the matter, has summoned Byju Raveendran to appear before it next week.
After the searches, the ED said several incriminating documents and data were seized during the search. “FEMA searches also revealed that the company has received foreign direct investment to the tune of ₹ 28,000 crore (approx) during the period from 2011 to 2023,” a media release from the probe agency said. The company has also sent around ₹ 9,754 crore to various foreign entities in the name of overseas direct investment during the same period, it added.
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 claimed adding that “it is business as usual at BYJU’s.”
The ED said the action was taken on the basis of “various complaints” received by private people, and alleged that Raveendran Byju was issued “several” summons, but he remained “evasive and never appeared” before the ED. “The company has not prepared its financial statements since the financial year 2020-21 and has not got the accounts audited, which is mandatory,” ED said.
The company has booked around ₹ 944 crore in the name of “Advertisement and Marketing expenses”, including the amount remitted to foreign jurisdictions, the probe agency said. “Hence, the genuineness of the figures provided by the company are being cross-examined from the banks,” it added.
In view of a host of complaints, the NCPCR said, “The Commission is in observance that indulging into malpractices to lure the parents or children into entering loan-based agreements and then causing exploitation is against the welfare of children and in pursuance of the functions and powers under Section 13 and 14 of CPCR Act, 2005,” NCPCR said.
The Commission asked the company to appear in person before it along with the details of all the courses run by BYJU’s for children, the structure of these courses and the fee details, the number of students currently enrolled in each course, and the refund policy of BYJU’S. It has also asked for the legal documents regarding the recognition of BYJU’s as a valid ed-tech company and all other relevant documents.
Byju Raveendran was a maths tutor before he co-founded BYJU’s with his wife Divya Gokulnath in 2011. He belongs to a family of teachers and was born in Kerala. The CEO aimed at producing educational content with a special focus on the K-12 education market.
BYJU’s was founded as Think and Learn Pvt. Ltd. BYJU’s – The Learning App, the company’s flagship product, was launched in 2015. A year later, it became the first Asian company to secure investment from the Chan Zuckerberg Initiative. According to Forbes, the current net worth of Byju Raveendran is $1.4 billion. He is ranked 2071 among the richest people in the world.
He became a billionaire in 2019 after Think and Learn Pvt. received $150 million in funding. Divya Gokulnath was one of Byju Raveendran’s early students. The two got married in 2009 and have two sons. Divya helps run the company and is also part of the board.