Byju’s, India’s most valuable startup, announced on Wednesday that it expects minimal or no penalty from the recent accusations made by India’s crime-fighting agency regarding a breach of the nation’s foreign exchange rule. The startup stated that the allegations are “solely technical” in nature and that it remains fully compliant with India’s forex rules, having filed the necessary intimation for all foreign direct investment received.
Key Takeaway
Byju’s expects any penalty resulting from the allegations to be minimal or even non-existent, emphasizing that they are technical in nature and that the startup is fully compliant with India’s forex rules. The company remains confident in successfully resolving the case based on previous actions taken by the authority.
Confident of Successful Resolution
Byju’s expressed confidence in successfully dealing with the case, citing “precedent actions” taken by the authority. The startup anticipates that any fines imposed, “if any,” will be nominal. The Enforcement Directorate recently accused Byju’s of violating rules under the Foreign Exchange Management Act (FEMA), amounting to $1.12 billion, due to a failure to submit documents of imports against advance remittances and the delay in filing documents for foreign direct investment.
Focusing on Compliance and Due Diligence
Byju’s clarified that the ED notice does not specify the exact amount of the fine but acknowledges the quantum of foreign direct investment received by the startup. In response, Byju’s reaffirmed its commitment to complete adherence to all relevant FEMA regulations, as verified by comprehensive due diligence conducted by reputable law firms. This statement aims to provide reassurance to stakeholders.
This announcement comes as a relief for Byju’s, which is currently facing multiple challenges. Earlier on Wednesday, Prosus, which holds a 9% stake in Byju’s, added to the startup’s concerns by reducing its valuation to under $3 billion. Byju’s will continue its efforts to address these challenges swiftly.
