Enforcement Directorate officials searched the Bengaluru-based startup’s offices and seized documents and digital data, the agency said in a Twitter post. The probe is happening under the Foreign Exchange Management Act, it said.
“Byju’s has taken all efforts to fully comply with all applicable foreign exchange laws and all our cross-border transactions have been duly vetted by both its professional advisors/counsel and advisors/counsel of the investment funds and other sophisticated counterparties,” Byju Raveendran, the startup’s founder and chief executive officer, wrote in a letter to employees.
The investigations come at a time when the company, valued at $22 billion, is in talks with investors to raise funds to address a liquidity crunch. The firm had also been trying to appease creditors seeking restructuring of a $1.2 billion term loan after the once high-flying startup missed deadlines to file financial accounts for the year to March 31, last year.
Raveendran wrote that the company had made a number of overseas acquisitions as part of its growth strategy and had transferred funds abroad to pay for the deals. He added that all of the transactions had been made through regular banking channels with the appropriate documentation.
More than 70 investors have invested in Byju’s and they have conducted thorough due diligence, he said. “We are confident that the authorities will also come to the same conclusion,” he added.
Byju Raveendran, a son of educators, founded his eponymous startup in 2015. The firm, whose parent company is formally known as Think & Learn Pvt, is the largest of a crop of startups that over the past decade have thrived on India’s growing mobile connections and foreign investments.
“Lastly, I want to express my gratitude to all of you for your continued hard work and dedication towards our mission of transforming education in India and around the world,” Raveendran wrote. “I understand that this news may have caused concern and I want to assure you that we remain steadfast in our commitment to our students and our vision.”