Amid reports of the Enforcement Directorate (ED) issuing show cause notice to BYJU’S for alleged Foreign Exchange Management Act (FEMA) rules violation, the embattled edtech giant told its shareholders on Tuesday (November 21) that it is fully compliant with the regulations.
“Dear shareholders… We want to assure you that BYJU’S has always been fully compliant with FEMA regulations. The news story in question is entirely based on hearsay and lacks any factual basis,” the edtech giant said in an email sent to its shareholders. BYJU’S also denied receiving any notice from the ED on the matter.
Inc42 has accessed a screenshot of the email.
The company also said that a recent due diligence exercise by a top law firm found no FEMA violations by BYJU’S and attached an email from the said law firm.
“BYJU’S has maintained a cooperative stance with the ED throughout their inquiries. We have satisfactorily answered all their queries, both verbally and on record,” the edtech giant added.
Earlier today, media reports said that BYJU’S has received a show cause notice from the ED for alleged FEMA violation of over INR 9,000 Cr. However, BYJU’S rejected this claim.
In a statement, the company said, “BYJU’S unequivocally denies media reports that insinuate it has received a (any) notice from the Enforcement Department. The company has not received any such communication from the Enforcement Department.”
It must be noted that the ED conducted search and seizure operations at premises linked to the edtech giant earlier this year.
The development comes at a time when BYJU’S has been in the news for all the wrong reasons over the past year. After missing multiple deadlines for filing its financial statements for the financial year 2021-22 (FY22), BYJU’S, earlier this month, released some select numbers.
Excluding its acquired businesses, BYJU’S reported a standalone EBITDA loss of INR 2,253 Cr in FY22 as against an EBITDA loss of INR 2,406 Cr in FY21. The entity’s total income stood at INR 3,569 Cr in FY22 as against INR 1,552 Cr in FY21. However, there is no clarity on the release of consolidated financial numbers for FY22.
Amid all this, the edtech giant has also been engaged in negotiations with its lenders to restructure its $1.2 Bn Term Loan B (TLB). Further, the company has also been looking to sell two of its US-based entities, Epic and Great Learning, to raise up to $1 Bn to clear all debt and fuel business operations.
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