Also in this letter:
■ ED carrying out searches in certain premises of Paytm, PayU: report
■ Vedanta to set up iPhone manufacturing unit in Maharashtra
Google loses EU antitrust appeal, fined 4.12 billion euros
Byju’s adjusts revenue for FY21 to Rs 2,280 crore, losses climb to Rs 4,588 crore
Think & Learn Pvt Ltd, the parent company of edtech brand Byju’s, said its operating revenue for the financial year ending March 2021 (FY21) was readjusted to Rs 2,280 crore, even as it suffered massive losses of Rs 4,588 crore, compared to just Rs 262 crore in the previous financial year.
This is a significant drop of around 40% from what the company had previously forecast (around Rs 4,400 crore).
Catch up fast: We first reported the difference in unaudited revenue and what the auditor, Deloitte, finally signed off on September 12. We reported that over the past week, Founder and CEO Byju Raveendran informed company shareholders of the discrepancies, attributing them to business model changes necessitated by the pandemic.
Driving the news: Raveendran told us in an interview on Wednesday that there was significant revenue growth from FY20, but due to revenue recognition changes, this is being pushed back to the next fiscal year. “There is no loss of income that is denounced in the audit report,” he insisted. Because of that, there will be more growth in FY22,” he said.
Listener changes: Deloitte said Byju’s revenue from streaming services (the online courses it sells), which was previously fully recognized at the start of the contract, has been adjusted to be pro-rated over the contract period.
In addition, interest paid to lending partners on behalf of customers on loans made directly to customers has been reclassified from finance costs and adjusted to revenue as they are payments to customers.
These two changes had a huge impact on the revenue of the online tutoring platform, also resulting in the significant losses recorded by the company. Raveendran said the losses of Rs 4,588 crore incurred by the business were equally split between Byju’s and Whitehat Jr, which it acquired in 2020.
ED conducting searches at some Paytm, PayU premises: report
The Enforcement Directorate (ED) is conducting raids on several premises of fintech companies Paytm and PayU in connection with a case involving unscrupulous Chinese loan applications.
Sources told ANI that the searches were taking place in Mumbai, Delhi, Gurugram, Lucknow and Kolkata. The ED has yet to comment on the matter.
Second round: On September 3, the agency conducted similar searches at the premises of online payment gateways, including Razorpay Pvt Ltd, Cashfree Payments and Paytm Payment Services Ltd.
The case is based on 18 FIRs registered by Bengaluru City Cybercrime Police Station, against numerous people for allegedly extorting money and harassing people who took out small loans through mobile apps, many of them of Chinese origin.
“During investigations, it has come to light that these entities are run by Chinese people…by using false Indian documents and making them false administrators of these entities, they are generating proceeds of crime,” ED said.
The agency added that these entities conduct their business through various merchant IDs and accounts held with payment gateways and banks.
Answer: A spokesperson for Razorpay said after the September 3 searches: “Some of our merchants were under investigation by law enforcement about a year and a half ago. As part of the ongoing investigation, authorities have requested additional information to assist in the investigation. We have fully cooperated and shared KYC and other details. Authorities have been satisfied with our due diligence process.”
Vedanta to set up iPhone manufacturing unit in Maharashtra
In a significant boost to electronics manufacturing in India, Vedanta, led by Anil Agarwal, will set up a hub to manufacture Apple iPhones and TV equipment in Maharashtra, Reuters reported, citing an interview that Agarwal granted to CNBC-TV18.
This comes a day after Vedanta Group and the Gujarat state government signed a Memorandum of Understanding (MoU), under which the company will invest over Rs 1.54 lakh crore in the state to implement set up a semiconductor and screen manufacturing unit.
iPhone Wars: The race to make iPhones in India is heating up, with the Tata group also in talks with Taiwanese electronics giant Wistron to set up a joint venture. The move is expected to make India a hub for electronics manufacturing as it tries to steer global giants away from China.
Apple is looking to diversify production away from China as Covid lockdowns have disrupted supply chains in the world’s second-largest economy.
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Google loses EU antitrust appeal and fined 4.12 billion euros
Google suffered its second antitrust setback in less than a year on Wednesday as Europe’s top court agreed with EU antitrust regulators that it had abused its dominance. The court, however, reduced the fine by 5% due to a disagreement on one point.
Catch up fast: The European Commission, in its 2018 ruling, said Google was using Android to cement its dominance in general internet search through payments to big manufacturers and mobile network operators and restrictions.
Answer: “We [Google] are disappointed that the court did not reverse the decision in its entirety. Android has created more choice for everyone, not less, and supports thousands of successful businesses in Europe and around the world,” the company said in an email response to Reuters.
There is more: Google was also fined 69.2 billion won ($50 million) in South Korea for failing to clearly inform users of the service and obtain their prior consent when collecting and analyzing data. behavioral information to infer their interests or use it for personalized advertisements.
And a US court has allowed a larger antitrust case against Google to proceed. The petitioners allege that the tech giant has monopolized the ad tech market and suppressed competition through its access to data.
Twitter employees concerned about Chinese agent, US Senate whistleblower says
The FBI has informed Twitter Inc that at least one Chinese agent works at the company, U.S. Senator Chuck Grassley told a Senate hearing on Tuesday in which a whistleblower testified, raising further concerns. regarding foreign interference in the influential social media platform.
Peiter “Mudge” Zatko, a celebrity hacker who served as Twitter’s security chief until he was fired in January, said some Twitter employees feared the Chinese government could collect data about Twitter users. company.
Senate Hearing: Zatko’s testimony before the Senate Judiciary Committee revealed that Twitter’s security issues could be far more serious than previously thought. He alleged for the first time that the company had been informed that Chinese government agents were working for the social media company.
“It was a big internal conundrum,” Zatko said, adding that the company was reluctant to turn away from China, the fastest growing overseas market for ad revenue. “In a nutshell, if we were already in bed, it would be problematic if we lost that source of income,” he said.
Call to action: Many senators used the testimony to support legislation they had introduced to curb Big Tech’s market power, with a few calling for immediate direct action against Twitter.
Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Gaurab Dasgupta in New Delhi. Graphics and illustrations by Rahul Awasthi.