The Directorate of Enforcement (ED) on Saturday searched the premises of Think & Learn Private Ltd, which owns and operates edtech unicorn Byju’s, for alleged violations of the Foreign Exchange Management Act (FEMA). The law enforcement agency said in a statement that it searched two company premises as well as CEO Byju Raveendran’s residential premises in Bengaluru, where it seized “various incriminating documents and digital data”.

The agency added that during the search, it allegedly discovered that the edtech firm had received Rs 28,000 crore in FDI between 2011 and 2023. In addition, the company also sent out Rs 9,754 crore as overseas direct investment during the same period. The company’s advertisement and marketing expenses, which included funds sent to foreign jurisdictions, were around Rs 944 crore.

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“The company has not prepared its financial statements since financial year 2020-21 and not got its accounts audited, which is mandatory. Hence, the genuineness of the figures provided by the company are being cross-examined from banks,” the statement added.

ED said it undertook a full-fledged investigation into the edtech firm after receiving multiple complaints from various individuals, alleging that founder and CEO Raveendran has been uncooperative and evasive.

The agency said he failed to appear before the agency during the investigation despite being summoned several times.

Responding to the development, Byju’s said in a statement that the visit by ED officials was related to a routine inquiry under FEMA. “We have been completely transparent with the authorities and have provided them with all the information they have requested. We have nothing but the utmost confidence in the integrity of our operations, and we are committed to upholding the highest standards of compliance and ethics. We will continue to work closely with the authorities to ensure that they have all the information they need, and we are confident that this matter will be resolved in a timely and satisfactory manner,” the statement added.

The ED searches come at a time when the startup has been accused of irregular accounting practices by its own financial auditor. Last year, the startup also faced intense scrutiny from the ministry of corporate affairs (MCA) after its FY21 financials were delayed by almost 18 months beyond the prescribed timeline. It filed its FY21 results in September after receiving an unqualified report from its auditor, Deloitte Haskins & Sells.

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In its report, Deloitte compelled Byju’s to defer some 40% of revenues to subsequent years since it sold multi-year subscriptions. The deferral of revenue meant that revenue recognised from courses that Byju’s sells on a multi-year basis (up to three years) got deferred across three years rather than booked in a single year. This revenue recognition policy was suggested by Deloitte since students are allowed to cancel multi-year subscription and get their refunds anytime during the subscription plan.

The company in September 2022 reported that its net loss rose to Rs 4,588 crore from Rs 231.69 crore in FY20. The company’s total revenues during the year saw a marginal decline of 3.32% to Rs 2,428.39 crore. The huge jump in losses during the year was due to deferral of 40% of revenues to subsequent years, but not the costs. The company is yet to release a financial performance report for FY22.