In Short
- Edtech giant Byju’s faces inspection over corporate governance concerns
- Development after Deloitte resigns as auditor of Byju’s
- The development signals more trouble for the start-up
By India Today Business DeskThe Ministry of Corporate Affairs (MCA) has ordered an inspection of edtech startup Byju’s, citing concerns over corporate governance lapses, reported CNBC-TV18.
The ministry’s move follows recent developments, including Deloitte and three board members severing ties with the company amidst a legal battle with lenders and a decline in valuation.
Deloitte, one of the world’s largest auditing firms, recently resigned as Byju’s auditor with “immediate effect” mid-term due to “long-delayed” financial statements, according to the firm’s resignation letter.
Also Read | Byju’s employees asked to resign voluntarily as company begins silent layoffs to save costs
Byju’s has appointed BDO as its new auditor. Three board members from key investors Sequoia Capital India, the Chan-Zuckerberg Initiative, and Naspers Ventures have also resigned from the board, leaving only the founder’s family members on the board.
Byju’s valuation has faced a significant decrease from $22 billion in 2022 to $8.4 billion earlier this year, with concerns arising over governance issues, audit delays, and employee layoffs.
Meanwhile, the edtech start-up is also embroiled in a dispute with lenders over allegations of hiding $500 million, leading to a counter-suit by lender Redwood Management.
Byju’s has not yet responded to requests for comment, and the finance ministry has not provided a statement.
Also Read | ExplainedWhy Edtech start-up Byju’s is facing heat from ED
Irwin Lind
Keven Bayer
Cakra News