India probes education platform Byju’s over alleged forex law violations

India’s financial crime-fighting agency said on Saturday it had raided three premises linked to education platform Byju’s and its billionaire CEO Byju Raveendran over suspected breaches of the country’s foreign exchange laws.

The Enforcement Directorate (ED) said in a statement it had seized various documents and digital data during the search, and had issued summons for the CEO, but he did not appear.

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 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 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 fiscal year 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.

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