Byju's investor event amid ED lookout notice and customer's TV heist!

The company's foreign remittances and investments abroad, purportedly violating FEMA, are under probe for causing loss of revenue to the government

Byju Raveendran was once worth almost $5 billion, according to reports (photo: IANS)
Byju Raveendran was once worth almost $5 billion, according to reports (photo: IANS)

NH Business Bureau

The Directorate of Enforcement has escalated its pursuit of Byju Raveendran, founder of the embattled tech company Byju's, reportedly pushing for a lookout circular to prevent him from leaving the country.

The Enforcement Directorate's actions against Byju Raveendran and investigations into Byju's stem from allegations of significant foreign remittances and investments abroad by the company. These purportedly violate provisions of the Foreign Exchange Management Act (FEMA) and have caused a loss of revenue to the Indian government, per earlier statements by the ED. 

According to a report by the Economic Times, a lookout circular 'on intimation' had already been issued against Raveendran. The report added that Raveendran's frequent travels between Delhi and Dubai over the past three years had raised suspicions. This ED move came amidst a storm of legal battles and internal strife within the edtech startup.

Raveendran is also slated to face a high-voltage extraordinary general meeting (EGM) on Friday, 23 February, where certain investors have sought his removal from the company's leadership.

Adding to the legal complexities, the Karnataka High Court recently intervened in response to a petition filed by Think & Learn Pvt Ltd, the parent company of Byju's. The court ordered that any resolutions proposed for the 23 February EGM, called by select investors, be deemed invalid until the final hearing and disposition of the petition. However, the court has allowed the EGM to proceed as scheduled.

Byju's, in its petition under Section 9 of the Arbitration and Conciliation Act, 1996, argued that certain investors—including General Atlantic, Chan Zuckerberg Initiative and others—violated the company's Articles of Association, Shareholders’ Agreement and the Companies Act, 2013, by calling for the EGM.

Meanwhile, last year the ED had issued show-cause notices to Think & Learn Pvt Ltd and to Raveendran over Byju's alleged FEMA violations. Byju's, however, had stated that the queries raised by the ED were "solely technical in nature".

Amidst all this legal turmoil, Byju's is grappling with other public relations challenges too. A recent incident, highlighted by the Indian Express, involved a family initiating a refund request for an unused tablet and learning programme — and removing a TV from a Byju's office in protest after weeks of unsuccessful attempts to secure a refund!

The TV heist incident, captured on video and circulated on Instagram, has sparked wider discussion about customer service standards in the edtech sector and the complexities of refund procedures. 

Once celebrated as one of India's most promising startups, with a peak valuation of $22 billion, Byju's now finds itself entangled in a web of challenges.

These include mounting debts, cash flow issues, reports of poor working conditions and questions around the soundness of the company's business decisions.

As legal battles intensify and public scrutiny deepens, the future of Byju's hangs in the balance.

Follow us on: Facebook, Twitter, Google News, Instagram 

Join our official telegram channel (@nationalherald) and stay updated with the latest headlines