Ministry of Corporate Affairs Orders Inspection on BYJU’S Amid Corporate Governance Concerns
- ByStartupStory | June 23, 2023
The Ministry of Corporate Affairs has reportedly initiated an inspection against leading edtech company BYJU’S, citing concerns over various corporate governance lapses, according to CNBC-TV18.
The inspection order comes as a double blow to the edtech unicorn, following reports of three board members stepping down and the resignation of auditing firm Deloitte Haskins & Sells as BYJU’S and Aakash’s statutory auditor. However, BYJU’S has denied the reports of board member resignations, while Deloitte attributed its decision to the delay in the company filing its FY22 financial statements.
In response to the situation, BYJU’S has appointed BDO (MSKA & Associates) as its statutory auditor for the fiscal year commencing from FY22, for a duration of five years. The appointment follows the recent hiring of Ajay Goel as the Chief Financial Officer in April, which coincided with a delay in filing the FY22 financials with the Registrar of Companies.
BYJU’S financial performance has faced challenges, with the edtech giant reporting a significant loss of Rs 4,564.38 crore in FY21, surpassing its FY20 loss of Rs 305.5 crore. Moreover, the company is currently encountering difficulties in securing substantial funding and resolving conflicts with creditors over a $1.2 billion term loan B (TLB).
Amid the decline of the pandemic-driven edtech surge, BYJU’S has been grappling with escalating losses, workforce reductions, and unresolved loan obligations. The company recently announced a new wave of job cuts, affecting more than 1,000 individuals.
The ministry’s inspection order reflects the growing concerns over corporate governance practices within the edtech industry. BYJU’S, known for its popular learning app, will now face a detailed scrutiny of its operations and adherence to regulatory norms.
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