ED seeks look out circular against Byju's founder amid ongoing investigation: Report

The Indian Directorate of Enforcement (ED) has urged the Bureau of Immigration (BOI) to issue a look-out circular (LOC) against Byju Raveendran, the founder and CEO of the embattled edtech giant Byju's, as reported by the Economic Times.

The ED's request for a new LOC, which prevents an individual from leaving the country, comes as part of an ongoing investigation into alleged Foreign Exchange Management Act (FEMA) violations by Byju's.

The ED's Bengaluru office, now overseeing the case, expressed the need for the circular to safeguard the interests of investors.

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Raveendran, who has been shuttling between Delhi and Dubai in recent years, faced an 'on intimation' LOC more than a year and a half ago.

However, the recent shift of the investigation to the Bengaluru office prompted the ED to seek a revised LOC to ensure Raveendran's compliance with the probe.

The ED served show-cause notices to Byju and Raveendran in November of last year on alleged FEMA violations totalling Rs 9,362.35 crore.

The ED had initiated investigations based on complaints regarding foreign investments and business conduct.

Searches at Byju's locations and Raveendran's residence had led to the seizure of pertinent documents related to investments.Bottom of Form

Other developments

According to previousmedia reports, Byju's CEO and founder, Byju Raveendran, secured relief as the court declined to halt an emergency meeting convened by investors, after the Karnataka High Court hearing on Wednesday.

The court ruled that resolutions passed during the upcoming shareholders meeting would be considered invalid.

Byju's, in response, asserted that decisions made during this emergency meeting would not be held until the court concludes the hearing, thus safeguarding Raveendran's position as CEO.

This move nullified the investors' attempt to vote out the company founders, protecting them from removal from the board of directors.

Byju's has faced a series of challenges since early 2023, including the resignation of its auditor, lenders initiating bankruptcy proceedings against a holding company, and a US lawsuit disputing loan terms.

The company accused certain investors, including General Atlantic, Peak XV (formerly Sequoia Capital India), and Chan Zuckerberg Initiative, of violating the shareholders' agreement by calling for the extraordinary general meeting on February 23.

Byju's argued in court that these investors were disrupting operations by hindering crucial funding.

The Karnataka High Court, responding to a petition by Think & Learn Pvt Ltd, Byju's parent company, ordered the invalidation of resolutions proposed in the February 23 EGM until the final disposition of the petition.

Despite this ruling, some investors plan to proceed with the EGM, seeking the removal of Byju as CEO, citing transparency issues and financial mismanagement under his leadership.

Investor sources contested the idea that the court invalidated the resolutions, asserting that the EGM would proceed with a vote against Byju as CEO.

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