New Delhi: The Indian government has initiated an inspection into the financial records of the troubled edtech giant Byju’s, according to reports. This comes after Deloitte Haskins and Sells resigned as Byju’s auditor due to delayed financial statement submissions. Several members, including GV Ravishankar of Peak XV Partners, Russel Dreisenstock of Prosus, and Vivian Wu of Chan Zuckerberg Initiative, have also stepped down from Byju’s board. The Ministry of Corporate Affairs has requested a report within six weeks, and there were earlier discussions of involving the Serious Fraud Investigation Office (SFIO) in examining irregularities at Think and Learn Pvt. Ltd, the company behind Byju’s.
Byju’s has denied receiving any communication from the Ministry of Corporate Affairs regarding a probe into its financial reporting compliance failures and governance lapses. The company stated its willingness to cooperate fully should a routine inspection occur. However, the government’s inspection adds to Byju’s existing challenges, as it has been embroiled in a crisis with its term loan B lenders since December. Byju’s and the bondholders have filed lawsuits against each other in US courts. With a valuation of $22 billion, Byju’s plans to restructure its $1.2 billion term loan and raise over a billion dollars to overcome financial difficulties.
Byju’s founder, Byju Raveendran, recently held an extraordinary general meeting (EGM) to address ongoing issues. He announced the formation of a Board Advisory Committee (BAC) comprising independent directors with diverse corporate backgrounds. The BAC’s role is to advise and guide the CEO on matters concerning the board’s composition and suitable governance structure for Byju’s. The company has already undergone significant job cuts and seeks additional funding to navigate its current challenges.