Company has denied the report that the SFIO is probing into its alleged financial reporting compliance failures and governance lapses.
Byju’s account books are now under the scanner as the union government has ordered an inspection into the education-technology titan, which has been rocked by the resignation of its auditor and three board members last month, according to people familiar with the matter.
The Ministry of corporate affairs has sought a report in six weeks, said the people, asking not to be named as the information isn’t public. The inspection follows an internal assessment of the company’s state of affairs and based on the findings of the inspection the government will decide if the matter needs to be brought up to the Serious Fraud Investigation Office.
However, the company has denied the report that the SFIO is probing into its alleged financial reporting compliance failures and governance lapses.
This investigation will be an added headache to the Byju’s, valued at $22 billion in the last funding round, as it restarts negotiations to restructure its $1.2 billion term loan after breaching a few terms of its debt agreement. Recently, the company has cut thousands of jobs and is seeking to raise more than a billion dollars to tide over financial difficulties.
Deloitte Haskins and Sells resigned as Byju’s auditor last month, citing a delay in submitting financial statements. Representatives of three important banks: Peak XV, Prosus NV, and Chan-Zuckerberg Initiative quit Byju’s board the same week, underscoring a rapid erosion of thrust with the company’s ranks.
Post this, Byju decided to set up a Board Advisory Committee (BAC) to mitigate the backlash on corporate governance issues. The BAC was formed to advise Byju Raveendran, on Board composition and governance structure.