 "Troubles mount for Byju's, auditor Deloitte resigns over financial results")
In more trouble for Byju’s, statutory auditor Deloitte Haskins & Sells has resigned and said the edtech major is delaying filing financial statements. Separately, three of Byju’s’ board members reportedly resigned, but the company denied this.
In a letter to the board members of Think & Learn, the parent company of Byju’s, 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 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.”
Deloitte’s letter said the delay would have a significant impact on its ability to plan, design, perform, and complete the audit. “In view of the aforesaid, we are tendering our resignation as statutory auditors of the company with immediate effect,” it said.
Deloitte filed the resignation on the portal of the Ministry of Corporate Affairs. Deloitte was appointed auditor for five years, from April 1, 2020, to Mach 31, 2025. Meanwhile, Byju’s in a statement said it appointed BDO (MSKA & Associates) statutory auditors from FY22 and for five years.
“BDO will cover the holding company — Think and Learn Pvt Ltd — its material subsidiaries such as Aakash Education Services Limited as well as the overall group consolidated results,” said a statement from Byju’s.
The company said the selection of BDO was finalised after a rigorous process and was done by the new chief financial officer, Ajay Goel. The board members who reportedly resigned are G V Ravishankar of Sequoia Capital, Vivian Wu of the Chan Zuckerberg Initiative; and Russell Dreisenstock of Prosus.
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“Byju’s firmly denies these claims and urges media publications to refrain from spreading unverified information or engaging in baseless speculation,” said the edtech firm in an email response to Business Standard on the resignations.
Emails sent to Peak XV Partners (formerly Sequoia Capital India), Prosus and Deloitte remained unanswered. These resignations complicate the troubles the company is facing. It is in a legal battle with lenders in the US. The company has filed a case in the New York Supreme Court.
These are happening when Byju’s has announced IPO (initial public offering) plans for Aakash Educational Services by mid-next year.
“Very few know what’s going on. Besides, all those who resigned have a small percentage as stake in the company,” said a source in the know.
Among Peak XV Partners, the Chan Zuckerberg Initiative, and Prosus, the third holds the largest chunk with around a 9 per cent stake. Peak XV Partners holds 5-6 per cent and GA (General Atlantic) has about 7 per cent.
At present the largest shareholding is in the hands of the promoter, Byju Raveendran, and the Abu Dhabi Investment Authority (ADIA). A few days ago, the company initiated a fresh round of layoffs, taking the number of those dismissed to 3,500. All these problems are also related to the firm’s inability to file its latest financials.
Byju’s incurred losses of Rs 4,588 crore in FY21. Those are 19 times more than in the preceding year, according to the latest available financial report. The firm earned Rs 2,428 crore in revenue in FY21.