After BYJU’S Denial, ED Says Issued Show Cause Notice For FEMA Violation Of INR 9,362 Cr

In a recent development, the well-known edtech behemoth BYJU’S in India is now being investigated by the Enforcement Directorate (ED) for possible violations of the Foreign Exchange Management Act (FEMA), 1999. The parent firm of BYJU’S, Think & Learn Private Limited, and its founder, Byju Raveendran, have received show cause notifications from the ED. This article explores the specifics of the claims, BYJU’s answers, and the possible ramifications of this development.

Credits: Inc42

The Allegations: A Detailed Examination:

The ED, in a public statement, outlined multiple contraventions by Think & Learn and BYJU’S founder Raveendran. The alleged violations include failure to submit documents of imports against advance remittances made outside India, failure to realize proceeds of exports made outside India, delaying filing of documents against foreign direct investment (FDI), failure to file documents against remittances made outside India, and failure to allot shares against FDI received into the company.

According to the ED, allegations about the edtech startup’s overseas investments and business practices prompted it to launch the investigation into BYJU’S. The agency asserts that BYJU’S made substantial investments and remittances abroad, which resulted in a decrease in exchequer earnings. Following this, several BYJU’S-related locations were searched and seized in April. As a result, records pertaining to the company’s financing and foreign assets were seized.

BYJU’S Response: Denials and Due Diligence:

BYJU’S, in response to the initial reports, unequivocally denied receiving any show cause notices from the Enforcement Department. The company reassured its shareholders of full compliance with regulations, citing a recent due diligence exercise by a reputable law firm that found no FEMA violations. BYJU’S maintained a cooperative stance with the ED, asserting that it had answered all queries raised by the regulatory body.

However, the ED’s public statement contradicts BYJU’S claims, putting the company’s responses under scrutiny. This development comes at a tumultuous time for BYJU’S, marked by controversies, financial challenges, mass layoffs, high-level exits, and a potential debt crisis related to its $1.2 billion term loan.

Potential Impact on BYJU’S and Edtech Landscape:

There are concerns about how BYJU’s reputation and finances might be affected by the regulatory examination. If the claims of FEMA violations are validated, BYJU’s reputation in the market would suffer and financial fines could result. Internal issues were already evident by the company’s delayed release of its financial results, which resulted in the departure of its statutory auditor, Deloitte.

Furthermore, BYJU’s capacity to draw in partnerships and investments may be hampered by the ongoing disputes and uncertainty. The massive edtech company, well-known for its bold development plans and well-publicized acquisitions, may be seeing a halt in its rate of growth.

The wider implications extend to the Indian edtech landscape, which has witnessed significant growth and investment in recent years. BYJU’S, as a key player in this sector, has been instrumental in shaping the narrative of online education in India. Any setbacks for BYJU’S could have a ripple effect on investor confidence in the edtech industry as a whole.


The recent revelation of show cause notices from the Enforcement Directorate to BYJU’S, a company that has been at the forefront of the edtech revolution in India, has sent shockwaves through the industry. The allegations of FEMA violations add another layer of complexity to BYJU’S already challenging circumstances, including financial woes, leadership changes, and a potential debt crisis.

It will become evident how the regulatory investigation affects BYJU’S and the larger edtech scene. The public, stakeholders, and investors will be keenly observing how the business handles these obstacles and whether it can continue to occupy the top spot in the Indian edtech market. The investigation’s findings may have an impact on other companies operating in India’s dynamic and quickly changing edtech market, in addition to determining BYJU’S’s future course.