New Delhi, Sep 7
Grappling with several issues, Byju’s has found itself in new controversy as its auditor BDO resigned with immediate effect, highlighting multiple issues with the embattled edtech firm, including significant delays in financial reporting and inadequate management support.
Last year, Byju’s previous auditor Deloitte resigned, citing governance issues at the company.
In the resignation letter, BDO subsidiary MSKA said that there has been “inadequate support from the management of the Company in providing us the books of account, information and explanations sought by us and sufficient appropriate audit evidence to enable us to complete the audit for the Financial Year 2022-23.”
In a statement, a Byju’s spokesperson raised serious concerns about unethical requests made by the audit firm “and its failure to adhere to proper procedures”.
“The real reason for BDO’s resignation is Byju's firm refusal to backdate its reports, while BDO went to the extent of recommending a firm that could facilitate such an illegal activity.
“Multiple call recordings exist, where BDO representatives explicitly suggest backdating these documents, which Byju’s refused to do. Byju’s strongly believes that this is the main reason for their resignation,” said the edtech firm.
Byju's entered insolvency proceedings on July 16, 2024, due to a legal dispute with the Board of Control for Cricket in India (BCCI).
This triggered the appointment of an Insolvency Resolution Professional (IRP), which resulted in the suspension of the company’s Board.
According to the edtech firm, on July 17, BDO sent an email to the suspended board of Byju’s seeking certain clarification regarding historical transactions that Byju’s had undertaken with a partner based in the Middle-East.
Regarding the transactions with the Middle-East partner, “we wish to make it clear that the suspended Board and management of Byju’s, had taken the proactive step of arranging a forensic audit, fully transparent and supervised by BDO, to ensure that there were no issues well before their email on July 17,” said the edtech firm.
However, the forensic could not be completed due to the initiation of the insolvency proceedings on July 16.
Byju’s said the failure to complete the forensic, therefore, cannot be attributed to the suspended Board. The company hopes that the insolvency admission order will be vacated by the Supreme Court very soon.
Once India’s most valuable startup with a $22 billion valuation, Byju’s is mired in several controversies at the moment.
