Indian edtech giant Byju’s faces heat after auditor quits
India’s Byju’s tells investors it will file 2022 earnings by September
Indian education technology giant Byju’s, which lost its auditor after delaying financial statements, has told investors it will file 2022 audited earnings by September and 2023 results by December, a person with direct knowledge of the matter said.
Deloitte said on Thursday it was severing ties with Byju’s, one of India’s most successful startups, over its ‘long-delayed’ financial statements for the year ended March 2022. Board members representing Peak XV Partners, earlier known as Sequoia Capital India, Prosus and Chan Zuckerberg Initiative also stepped down, without publicly expressing their reasons.
The resignations are among the biggest crises for Byju’s, valued last year at $22 billion and backed by the likes of investor General Atlantic. The episode raises questions about the edtech firm’s corporate governance and comes weeks after it was raided over suspected violations of foreign exchange laws.
Byju’s leadership, including founder Byju Raveendran and Chief Financial Officer Ajay Goel, briefed about 75 shareholders on Saturday to address their concerns about the company’s financial affairs, said the source, who attended the meeting.
Goel told the investors Byju’s will submit 2021-22 audited results to Indian regulators by September and 2022-23 earnings by year’s end, the source said.
Byju’s, which became popular offering online and offline tutorials, declined to comment on Sunday. It has not commented on why its results have been delayed.
Deloitte, cutting short a term as auditor that was to end in 2025, said in its resignation there was a “significant impact” on its ability to audit the firm as it did not receive financial records from Byju’s despite several reminders. Byju’s has appointed BDO as its new auditor.
Byju’s has asked three board members to reconsider their resignations, Reuters reported on Friday. They decided collectively to quit after raising concerns in recent months with leadership about the audit delays and how Byju’s dealt with issues relating to its lenders, sources have said.
The company told investors it was focussing on appointing new independent directors to the board, said the source.
Of the investors who resigned from Byju’s board, Peak XV said it would support the company “to strengthen business processes and internal control mechanisms”.