Founder of Byju’s Raveendran pledges personal properties : Byju’s Raveendran and Think and Learn Pvt Ltd were served with show cause notices by the ED last month in relation to suspected foreign exchange violations.
Overview of founder of Byju’s Raveendran pledges home
Founder of Byju’s Raveendran pledges personal properties : The ED had sent show cause notices to Byju’s Raveendran divya gokulnath and Think and Learn Pvt Ltd last month due to suspected foreign exchange violations. Bloomberg said on Monday that Byju’s Raveendran, the creator of the educational technology platform Byju’s, has promised to raise money for his employees’ salaries by pledging his own house and those of his family members.
In order to secure a $12 million loan (₹100.07 crore), he pledged two houses belonging to his family and an under-construction villa in Bengaluru. When the revenue was generated, Think and Learn Private, the company that owns the platform, would be able to pay Raveendran’s 15,000 employees. Operating losses for the company’s primary online education business decreased by 6% to 24 billion rupees ($287.95 million) for the year that concluded on March 31, 2022, according to the audited results released by the company last month.
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Pledging properties for employee salaries
Byju’s latest news : According to a recent report by Bloomberg, Raveendran has committed two family-owned houses and an under-construction villa in Bengaluru as collateral to secure a substantial loan of $12 million (₹100.07 crore). The infusion of these funds is intended to facilitate the payment of salaries to the extensive workforce employed by Think and Learn Private, the parent company of Byju’s.
Financial landscape and audited results
In a backdrop of financial scrutiny, Byju’s recently disclosed its audited results for the fiscal year 2022. The company reported a 6% reduction in operating losses, amounting to 24 billion rupees ($287.95 million) for its core online education business in the year ending March 31, 2022. Despite this operational optimization, the ED’s focus on alleged foreign exchange violations has added an extra layer of complexity to the company’s financial landscape.
ED’s show cause notices
Last month, the Enforcement Directorate issued show cause notices to both Byju’s Raveendran and Think and Learn Pvt Ltd, citing potential foreign exchange violations totaling ₹9,362 crore. The allegations include the contravention of provisions under the Foreign Exchange Management Act (FEMA), encompassing issues such as failure to submit documents related to imports against advance remittances made outside India, delayed filing of documents for Foreign Direct Investment (FDI), and the failure to allot shares against FDI received into the company.
Byju’s response
Byju’s responded to the ED’s notice by characterizing the queries as “solely technical in nature.” The company asserted that it had filed requisite intimation for all FDI received, adhering to eligibility criteria and downplayed the impact of alleged non-filing of Annual Performance Reports (APR). The statement highlighted the company’s compliance with regulations, emphasizing the timely issuance and allotment of shares against the FDI received.
Conclusion
Byju’s Raveendran’s decision to pledge personal properties to ensure employee salaries underscores a commitment to the well-being of the workforce, even in the face of financial challenges. The ED’s ongoing scrutiny adds an additional layer of complexity to Byju’s corporate narrative, making it imperative for the company to navigate these regulatory challenges with transparency and diligence. The outcome of this situation will undoubtedly be watched closely, not only by the ed-tech industry but also by stakeholders keen on the evolving dynamics of corporate responsibility and financial compliance.
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