As per a report on CNBC-TV18, the corporate affairs ministry of India ordered an inquiry into EdTech startup company Byju’s last week. The ministry has considered the different corporate governance lapses that happened at Byju’s, said the television channel. Also, it was noticed that Byju’s had not responded on a timely basis to Reuters’ comment request.
The report comes a day after it was found that Deloitte and three board members of Byju’s have cut the relationship with the company at a time when it is dealing with a long legal battle with its lenders and there is also plummeting valuation in some investors’ consideration.
Byju’s is also in a legal battle with its lenders who claim that the company has hidden $500 million from them, which led it to cut ties with lender Redwood Management.
On the other hand, Deloitte Haskins & Sells, which are the auditors of the education tech startup Byju’s has resigned from the company due to its inability to make the audit reports for the financial years ended March 2021 and March 2022 thus increasing more financial worries for the startup.
As per the auditors of the firm, the financial statements of the Byju’s for the year ended March 31, 2022, are delayed for a longer period. According to the Companies Act, 2013, the audited financial statements for the year ended March 31, 2022, were pending to be shown to the shareholders in the annual general meeting by September 30, 2022.
There is no communication received on the resolution of the audit report changes of the year ended March 31, 2021, also the audit readiness status of the financial statements, underlying books, and records of the year ended March 31, 2022, and thus, they were unable to perform an audit as on date, said the company Deloitte. Due to these discrepancies, the company has been unable to perform, plan, design, and complete the audit as per the applicable auditing requirements. These reasons have prompted Deloitte to resign as statutory auditor of the company with quick effect. The company Deloitte was appointed by Byju’s for a five-year period till March 2025.
After the resignation of Deloitte, Byju’s has appointed BDO (MSKA & Associates) as its statutory auditors for the year starting from FY22 for the next five years. Under this new association, BDO will take over the responsibilities of the holding company, Think and Learn Pvt Ltd, its material subsidiaries such as Aakash Education Services Limited as well as the entire edtech group’s consolidated results. This complete audit coverage will provide a holistic view of Byju’s financial interpretation and secure transparency across the organization, Byju’s said.
Meanwhile, the company has also been on a layoff spree. In October 2022, it cut down its organizational force by laying off around 2,500 employees. Even now there are layoffs and the company is asking employees to quit by themselves across different departments.
(Image/The Indian Express)