The Ministry of Corporate Affairs has sought more information about Byju's and a final decision about whether to open a formal investigation is expected soon
The Ministry of Corporate Affairs is reviewing the nature of enforcement action it needs to take after the resignation of three board members and Deloitte Haskins & Sells Llp as the auditor of Byju’s parent company Think and Learn Pvt Ltd, according to a report by LiveMint.
The Ministry has sought more information about the embattled edtech firm and a final decision about whether to open a formal investigation is expected soon. The government can order an inquiry in the form of seeking information or examining books of account to check compliance or a full-fledged investigation.
“The enforcement action will depend on the auditor’s report to the government and the gravity of any lapses by the management. If the auditor suspects any fraud, he is under the obligation to report it to the government," reported LiveMint quoting a person aware of discussions in the government.
Last week, Deloitte Haskins and Sells resigned as Byju’s auditor citing a delay in submitting financial statements. Directors - GV Ravishankar, Russell Dreisenstock and Vivian Wu — also resigned from Byju’s board.
Under Section 143 of the Companies Act, a statutory auditor quitting an audit assignment must report to the government any fraud in the company if he has reason to believe that such a thing is happening.
However, Think and Learn has denied any reports of government inspection into Byju’s.
“The company has not received any communication from the MCA in connection with the resignation of the auditor and related matters,” said Zulfiquar Memon, managing partner at MZM Legal, which Byju’s said is its legal representative.
For months, India’s biggest edtech startup has been embroiled in disputes with lenders and thousands of job cuts.
Co-founder Byju’s Raveendran has reached out to investors to assure them that long-delayed financial information will soon be released.