India’s anti-money laundering agency, the Enforcement Directorate (ED), has conducted searches at the offices of Byju’s, one of the country’s leading edtech firms.
The searches, which took place in multiple locations across India, were part of an investigation into alleged financial irregularities and violations of the Prevention of Money Laundering Act (PMLA).
Byju’s, which is valued at over $16 billion, has been under scrutiny since last year when a whistleblower alleged that the company had inflated its user numbers and revenue figures to attract investors.
The ED’s investigation is focused on whether Byju’s used shell companies to launder money and evade taxes. According to sources, the agency is also examining the role of certain investors who may have facilitated the alleged illegal activities.
In a statement, Byju’s denied any wrongdoing and said it was cooperating fully with the authorities. “We are committed to the highest standards of corporate governance and compliance, and are confident that our conduct will be found to be fully compliant with all applicable laws,” the statement read.
The investigation comes at a time when the edtech sector in India is booming, as the pandemic has accelerated the adoption of online learning platforms. Byju’s, which offers a range of educational courses and products, has been one of the major beneficiaries of this trend, and has raised billions of dollars from investors in recent years.
However, the company has faced criticism from some quarters over its aggressive expansion and marketing tactics. Some experts have also raised concerns about the quality of its content and the impact of online learning on traditional educational institutions.
The ED’s investigation is likely to raise further questions about the governance and accountability of India’s tech unicorns, which have come under increased scrutiny in recent months. Last year, the country’s market regulator, the Securities and Exchange Board of India (SEBI), introduced new rules aimed at improving transparency and accountability among startups, including stricter disclosure requirements and greater scrutiny of fund-raising activities.
