Lessons from ED's crackdown on Byju's, Xiaomi to strengthen compliance

Experts are also of view that severe fines, penalties will push companies and startups to ensure their adherence to the regulatory framework when accepting foreign investments and issuing remittances

On November 21, the Enforcement Directorate (ED) issued a showcause notice of Rs 9,362 crore to Think & Learn, the parent company of edtech giant Byju's, and its founder Byju Raveendran for alleged violations of foreign exchange rules while attracting foreign investments from 2011 to 2023. The central probe agency charged them with contravening foreign exchange provisions, according to an order issued by the adjudicating authority of the Foreign Exchange Management Act (FEMA). This is the second-largest showcause to a unicorn, following a Rs 10,600 crore notice to Flipkart in 2021 for an alleged violation of foreign exchange rules.

Byju’s is