BYJU’s faces more troubles as three directors and Auditor Resigns
Edtech unicorn BYJU’s is facing corporate governance issues as three directors have resigned from the board. G V Ravishankar of Peak XV (earlier known as Sequoia Capital India), Russell Dreisenstock of Prosus and Vivian Wu of Chan Zuckerberg Initiative have resigned. As per reports, the issues between management style of BYJU’s and board members have been simmering over a long period. Additionally, the company auditor Deloitte has also stepped down from the duties. BYJU’s has appointed BDO MSKA associates as new auditor. Deloitte was appointed as the auditors for a period of five years starting from April 1, 2020 but the auditing firm has stepped down with immediate effect.
As per a source quoted by CNBC-TV18, there was no immediate trigger for the three board members to resign but issues about management style were raised for quite some time.
In the recent times, BYJU’s denied to make interest payment to creditors. The company filed a lawsuit in the New York Supreme Court against one of its lenders.
While media reports came today about resignation of board members, BYJU’s has issued statement denying the resignations. In an statement issued by the company to CNBC-TV18 it was mentioned, “Media reports suggesting the resignations of board members from BYJU’s is entirely speculative. Byju's firmly denies, the company has also called it baseless. And that if there are such developments or changes, the company will share it through official channels.”
As per a statement issued by auditing firm Deloitte, BYJU’s management has not shared the financial statements for year ending March 31, 2022. Clearly, the company is not cooperating with the auditors. In its official statement, Deloitte said, "The financial statements of the company for the year March 31, 2022 are long delayed…we have not received any communications on the resolution of the audit report modifications in the respect of the year ended March 31, 2022, 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.”
In April this year, Enforcement Directorate searched the premises of the company. As per report, the ED search was conducted after reports of alleged FEMA violations on foreign direct investment (FDI) to the tune of about Rs 28,000 crore during 2011-2023 at the parent company Think and Learn Private Limited.