Byju’s Founder Byju Raveendran attracts ED Lookout Notice for Rs. 9362 Cr FEMA Violation

ED issues Lookout Notice against Byju Ravindran, Founder of Ed-Tech Giant Byju’s
Byjus - Byju Raveendran - ED - Enforcement Directorate - FEMA Violation - Byju Raveendran ED Lookout Notice - Taxscan

The Enforcement Directorate has issued a look-out notice against Byju Raveendran, the founder of edtech company Byjus. The action is to avoid leaving the country. The ED has taken action against Byju Raveendran for allegedly violating the Foreign Exchange Act.

A year ago, the ED had issued a look-out notice against Byju Raveendran in a similar manner. The report, quoting ED sources, said that it was renewed earlier this month.

The ED alleged that Byju Raveendran’s Think and Learn Pvt Ltd violated the Foreign Exchange Act. According to the report, the ED found a violation of Rs 9362 crore.

The company failed to produce documents of various transactions including foreign direct investment. The ED also alleged that he earned crores abroad without informing the government.

The prominent educational technology firm, Byju’s, is currently under investigation by the Institute of Chartered Accountants of India ( ICAI ). The ICAI has forwarded the matter to its Disciplinary Committee for examination. The Financial Reporting Review Board ( FRRB ) of the ICAI has assessed the financial disclosures of Byju’s.

As per a member of the Financial Reporting Review Board ( FRRB ), there is a necessity for an extensive inquiry into the financial disclosures. If the auditor is found to have engaged in professional misconduct, they could be liable for a maximum penalty of Rs. five lakh and may be disqualified by the disciplinary committee.

Read More: ICAI Disciplinary Committee Examines Financial Disclosures of Byju’s

The Ministry of Corporate Affairs ( MCA ) reportedly ordered an inspection against an Indian multinational educational company, BYJU’S.

According to various reports, the Ministry has taken notice of significant corporate governance failures committed by the BYJU’s. The Ed-tech Firm suffered a huge blow when the auditing firm Deloitte Haskins & Sells resigned as BYJU’s and Aakash’s statutory auditor. Deloitte Haskins & Sell, one of the largest auditing firms, has stepped down from major Edutech Company Byju’s – Think and Learn Private Limited. On 22nd June 2023, the auditing firm submitted their resignation before the Board of Directors with immediate effect.

Read More: MCA orders Inspection into BYJU’S

At present, the alleged FEMA violations included the failure to realize proceeds of exports made outside India, delayed filing of documents for foreign direct investment ( FDI ), and non-compliance with filing requirements for remittances made outside India, causing a loss of revenue to the government of India.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates