The corporate affairs ministry has received calls for a closer look into the accounts of the company, say reports
Responding to media reports that suggested that the Ministry of Corporate Affairs (MCA) has ordered an inspection into Byju’s, the edtech startup on Friday denied the reports saying these are “speculative”.
“Media reports suggesting that MCA has ordered an inspection into BYJU’S are speculative, and denied by us. We have not received any such correspondence from MCA regarding this, and are not aware of any such inspection,” a Byju’s spokesperson said.
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The reports on Friday said the corporate affairs ministry has now received calls for a closer look into the accounts of the company. They also said the ministry has taken cognisance of various corporate governance lapses at Byju’s.
It comes after audit firm Deloitte has resigned as auditors of Byju’s citing a delay in submission of financial statements while almost simultaneously three of the edtech firm’s board members have quit in what is being seen as a deepening crisis at the decacorn.
Decacorns are privately-held firms that exceed the valuation of $10 billion.
Deloitte Haskins & Sells, which was slated to audit Byju’s until 2025, stepped down with “immediate effect” mid-term stating that “the financial statements of the company are long delayed.
In a letter sent to the board of Think & Learn Pvt Ltd (known as Byju’s), Deloitte said it has not been able to start an audit due to the delays and that will have a “significant impact” on its ability to “plan, design perform and complete” the audit as per standards.
Byju’s in a statement said it has appointed BDO as its new auditor, adding this would help it “uphold the highest standards of financial scrutiny and accountability.
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Separately, three of Byju’s board members, including GV Ravishankar, MD of early-backer Peak XV Partners (formerly Sequoia Capital India), Russell Dreisenstock of Prosus and Chan Zuckerberg’s Vivian Wu have resigned, sources said.
The reasons for the resignation of the directors were not immediately known. The Byju’s board now comprises the founder family – chief executive Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran.
Byju’s, which skipped a USD 40 million repayment due earlier this month, has sued its lenders over alleged harassment in the recovery of the loan.
In a letter to the Byju’s board, Deloitte Haskins and Sells said that it is resigning as auditor of Think & Learn three years prior to the expiry of its contract due to a long delay in the edtech firm’s financial statement for the fiscal year ending March 31, 2022, the audit firm said in a regulatory filing.
The edtech firm separately announced that it has appointed BDO (MSKA & Associates) as its statutory auditors for the year commencing from the financial year 2022 for the next five years.
Deloitte has been working with Byju’s since 2016 and it was re-appointed as statutory auditor of Think and Learn Private Limited, which operates under Byju’s brand, for a five-year period starting April 1, 2020.
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“The financial statements of the company for the year ended March 31, 2022, are long delayed. In accordance with the Companies Act, 2013, the audited financial statements for the year ended March 31, 2022 were due to be laid before shareholders in the Annual General Meeting by September 30, 2022,” Deloitte said.
