A company spokesperson said on Wednesday that the notices received from the Enforcement Directorate (ED) last week are solely technical in nature and seek responses on issues such as delay in filing annual performance reports (APR).
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The APRs were with respect to duly compliant overseas direct investment (ODI) of about Rs 8,000 crore that arose from the delayed statutory audit of the financial year ended March 2022, it added.
Byju’s released this statement about a week after the ED issued show cause notices to Byju’s parent Think & Learn and its chief executive Byju Raveendran for alleged FEMA violations involving an amount of Rs 9,362.35 crore.
The latest statement from Byju’s confirms the company’s receipt of the notice. Last week, the company had said it had not received any such communication.
The Bengaluru-headquartered startup said it has filed requisite intimation for all foreign direct investment (FDI) which is received in accordance with the eligibility criteria in law and not affected by the alleged non-filing of APR.
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The company has also allotted shares within the prescribed time against the FDI received, it said.“Based on precedent actions by the adjudicating authority, we anticipate that the fines, if any, will be nominal. To cite an example, the late submission fee for such reporting delays that can be imposed pursuant to the RBI regulations with respect to APRs is very nominal (Rs 7,500) and by no means does the notice denote a fine,” the statement added.
The ED in a statement last week said that it had initiated investigation on the basis of various complaints regarding the foreign investment received by Byju’s and business conduct of the company.
“The company was also stated to have made significant foreign remittances outside India and investments abroad which were allegedly in contravention of provisions of FEMA, 1999 and caused loss of revenue to the Government of India,” ED had said.
The central agency had further said it had conducted searches at the premises of Byju’s and the residence of Raveendran on April 27-28 and seized documents pertaining to all investments received by the company as well as documents pertaining to the overseas investments made by the company.
The contravention, ED added, was caused by the company failing to realise proceeds of exports made outside India, by delayed filing of documents against the FDI in the company, by failing to file documents against the remittances made by the company outside India and by failing to allot shares against the FDI in the company.
Byju’s has made several overseas acquisitions in the past three years, including Great Learning, Osmo and Epic. It also part financed the deal to acquire Aakash from a subsidiary it had set up in Singapore. All these transactions fall under the purview of FEMA.
Earlier this month, the troubled edtech firm finally reported its delayed audited financial accounting for the year ended March 2022 – in parts – showing a 2.3 times growth in revenue to Rs 3,569 crore in its core business. Ebitda loss of the core business — financials for which were reported — was down to Rs 2,253 crore in FY22, from Rs 2,406 crore in the previous year. The company has yet to make its financials for 2021-22 available to the Registrar of Companies.