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Business News/ Companies / Start-ups/  Byju's clarifies on show cause notice issued by ED over FEMA violations
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Byju's clarifies on show cause notice issued by ED over FEMA violations

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, the release stated

ED had initiated the investigation on the basis of various complaints regarding the foreign investment received by the company Think and Learn Private Limited and the business conduct of the company (Bloomberg)Premium
ED had initiated the investigation on the basis of various complaints regarding the foreign investment received by the company Think and Learn Private Limited and the business conduct of the company (Bloomberg)

Ed-tech firm Byju"s on Wednesday issued a statement after it was slammed with violation of the FEMA rules by the Enforcement Directorate(ED). The firm said that it has received the notice from the Enforcement Directorate which now definitively concludes their investigation and the same has been stated in their press release dated November 21.

The queries received in the notice are solely technical in nature such as delay in filing Annual Performance Reports (APRs) with respect to duly compliant ODI investments of close to   8000 crores that arose from the delayed statutory audit (FY22).

The Company has however filed requisite intimation contemporaneously for all FDI which is received in accordance with the eligibility criteria in law and not affected by the alleged non-filing of APR. The Company has also issued/allotted shares within the prescribed time against the FDI so received.

This is being clarified to dispel any misgivings about wrong doing in relation to receipt of FDI or allotment of shares. The Company is advised that the delayed filing of APR (particularly when returns in relation to receipt of FDI have been filed in time) is a technical issue and the Company is confident of successfully dealing with the case.

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 ( 7500) and by no means does the notice denote a fine.

“We would like to strongly emphasise that the ED notice does not specify any quantum of fine but rather highlights the quantum of FDI/ODI (~ 9,000 crore) along with the deadlines that we missed in the reference period for this quantum," the statement further said.

We want to reassure you that BYJU'S maintains and will continue to maintain complete adherence to all relevant FEMA regulations, as verified by comprehensive due diligence conducted by reputable law firms.

The Enforcement Directorate has issued show cause notices to Byjus for violations under the Foreign Exchange Management Act (FEMA) violations amounting to 9362.35 crores.

"The Adjudicating Authority under the Foreign Exchange Management Act (FEMA), 1999 has issued Show Cause Notices to M/s Think & Learn Private Limited and Byju Raveendran on the basis of the complaint filed by the Directorate of Enforcement (ED) under subsection (3) of section 16 of FEMA, 1999 with respect to the contraventions of the provisions of FEMA, 1999 to the tune of Rs. 9362.35 Crore," the agency said in a release.

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Published: 29 Nov 2023, 09:56 PM IST
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