From a meteoric rise in a decade accelerated by the pandemic, to a 20-fold surge in losses caused by flawed calculation of revenues, edtech gian Byju's fortunes have changed drastically in the past year. Months after questions were raised about the firm's accounting methods and layoffs that left thousands jobless, it faces scrutiny from the Enforcement Directorate.
Even after the founder Byju Raveendran reassured his staff that the startup has followed all rules, the ED is reportedly approaching banks to extract further details about its dealings.
CEO yet to join probe?
The investigative body has also instructed Raveendran to join the probe, as he hasn't done so despite being asked to do so multiple times in the past couple of years.
ED has been looking at the compliance at Byju's with the Foreign Exchange Management Act since its inception in 2011, and that probe culminated into Saturday's search at its premises.
The intention behind getting banks involved is to get a closer look at the flow of funds at Byju's for clarity on some transactions.
Other entities to be approached
The Ministry of Corporate Affairs and the Director General of GST Intelligence may also be approached for information, as they had probed Byju's in the past.
In 2022, it had been pulled up for delaying returns for FY21 by the DGGA, and had agreed to clear its GST dues.
Money that came through foreign students as fees, from sale of gadgets abroad, and marketing expenses, is under the ED scanner.
In order to get explanations for transactions by which funds went outside India's jurisdiction, ED may also issue show cause notices to Byju's.
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