The central government has ordered the examination of the financial records of the prominent Edutech company, Byju’s. The company is facing significant financial and managerial challenges. Recently, the auditors of the company resigned, followed by the departure of three board members.
As per the report of NDTV, unnamed sources have disclosed that the Ministry of Corporate Affairs has requested a report within six weeks. This inspection comes in response to an internal evaluation of the company’s current situation. Depending on the findings of the inspection, the government will determine whether the matter should be referred to the Serious Fraud Investigation Office (SFIO).
Established in 2011, Byju’s introduced its learning app in 2015. The edtech company achieved unicorn status (a valuation of $1 billion) with 15 million subscribers by 2018, garnering significant attention.
With the onset of the Covid-19 pandemic, Byju’s experienced considerable growth as students increasingly embraced online learning during lockdowns. However, in 2021, the company incurred a loss of $327 million. The company also witnessed huge layoffs in the past year and this year.
During May, the company faced a lawsuit filed by its lenders in a US court. The lenders claimed that Byju’s had missed payments and broken the loan agreement’s clauses, which prohibited material delays in the publication of financial results. The company was also accused by the lenders of misappropriating money through its US-based subsidiary, Alpha. Byju’s, however, refuted these accusations made against it.
On June 22, 2023, the auditing firm Deloitte tendered their resignation to the Board of Directors, effective immediately. Despite the appointment of BDO as their new auditors, uncertainties persist regarding the future of the company.
As per reports from NDTV, no response was received from a spokesperson for Byju’s regarding the matter, despite attempts made through email and text messages seeking comment. Similarly, there was no immediate response to an email sent to the Ministry for Corporate Affairs.
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