A year after the Indian company’s late financial reporting garnered international criticism, global heavyweight Deloitte quit as Byju’s auditor and three board members resigned from the most valued Indian startup on Thursday, sending shockwaves across the industry.
In a statement, Byju’s, a $22 billion company, described Deloitte’s retirement as a “planned transition” and denied that any of its board members had resigned. Deloitte was supposed to collaborate with the Indian firm until 2025, but it raised worries as it gave Byju’s board notice of its resignation. The startup announced that BDO (MSKA & Associates) has been selected as its statutory auditor.
Deloitte resigned from Byju’s board of directors on Thursday, stating that it had delayed the auditing of the edtech company’s financial statements for the year ending March 2022.
It added:
The financial statements of the company for the year ended March 31, 2022 are long delayed. In accordance with the Companies Act, 2013, the audited financial statements for the year ended March 31, 2022 were due to be laid before shareholders in the Annual General Meeting by September 30, 2022.
We have also not received any communication on the resolution of the audit report modifications in respect of the year ended March 31, 2021, status of the audit readiness of the financial statements and the underlying books and records for the year ended March 31, 2022 and we have not been able to commence the audit as on date.
As a result, there will be significant impact on our ability to plan, design, perform and complete the audit in accordance with the applicable auditing standards. In view of the aforesaid, we are tendering our resignation as statutory auditors of the company with immediate effect.
Last year, after failing to file its financial statements on multiple occasions, Byju’s came under heavy scrutiny from the government, investors, and creditors. Byju’s ultimately released its financial statements in September for the year ending in March 2021, disclosing revenue statistics that were lower than expected.
Deloitte’s concerns were not addressed by the corporation, but it did express its “sincere gratitude” to the departing auditor.
According to a person with knowledge of the situation, the board has accepted the resignations of GV Ravishankar of Peak XV Partners (formerly known as Sequoia India and Southeast Asia), Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus.
Byju’s responded, stating: “A recent media report speculating the resignations of Byju’s board members is absolutely unfounded. Byju’s vehemently refutes these assertions and requests that media outlets desist from disseminating unreliable material or engaging in idle conjecture.
Byju Raveendran, Divya Gokulnath, and Riju Raveendran continue to serve on the board of the firm as co-founders.
The startup, which is also the most valued education technology company in the world, is battling a number of difficulties. It counter-sued its lenders after refusing to pay a $40 million payment earlier this month. According to Byju’s, its lenders were using “bad-faith negotiating tactics.” Byju’s has allegedly officially defaulted on the loan, according to the lenders.
Along with eliminating 1,000 workers, the firm is trying to get its finances in better shape. At the end of March of this year, BlackRock reduced Byju’s valuation by over two-thirds, to $8.4 billion, according to press sources.
