Byju: The creator of the troubled edtech startup Byju’s, Byju Raveendran, may have to abide by a travel ban because the Directorate of Enforcement has requested a “look out circular” (LOC) against him. This occurs in front of this Friday’s highly anticipated Extraordinary General Meeting (EGM), when some investors have demanded that he be removed.
Investors’ Quest for Leadership Change
The upcoming EGM, scheduled for February 23, has drawn interest since some investors want to remove Raveendran from his role. The parent company of Byju, Think & Learn Pvt Ltd, filed a case, and the Karnataka High Court has now intervened, declaring that any resolutions offered during the EGM will be considered null until a final decision is made on the matter.
EGM Proceeds Amidst Unsettled Debate
The EGM can go forward as planned thanks to the court’s ruling, but the debate surrounding it hasn’t been settled. Byju’s filed a petition under Section 9 of The Arbitration and Conciliation Act, 1996 to begin legal proceedings. The company claims that by demanding the EGM, some investors—including well-known figures like General Atlantic and Chan Zuckerberg Initiative—have broken a number of contracts and other statutes.
Forex Breaches Unveiled
The claim of foreign exchange breaches is one of Byju’s problems, and it has aided in the argument for the LOC against Raveendran. Show cause notices were sent to M/s Think & Learn Private Limited and Byju Raveendran by the adjudicating authority under FEMA in November 2023.
This was in response to a complaint filed by the Directorate of Enforcement (ED) under sub-section (3) of section 16 of FEMA, 1999, regarding violations of FEMA, 1999 provisions totaling Rs. 9362.35 Crore.
Foreign Investment Under Scrutiny
Based on many complaints about the foreign investment that M/s Think and Learn Private Limited received and the company’s business practices, ED had opened an inquiry. Additionally, it was claimed that the corporation had invested overseas and sent money home, purportedly in violation of FEMA, 1999 regulations and costing the Indian government money.
Byju’s and Raveendran Grapple with ED’s FEMA Violation Notices
Think & Learn Pvt Ltd and Raveendran have already received show-cause notices from the Enforcement Directorate (ED) for alleged FEMA (Foreign Exchange Management Act) violations. In response, Byju’s said that the ED’s questions were exclusively technical in nature. The conclusion of the EGM and the ongoing legal disputes involving Byju’s and its creator continue to be the key points of interest as the scandal develops.
