Government Initiates Inspection of BYJU’S Account Books: Edtech Giant Faces Regulatory Scrutiny
- ByStartupStory | July 11, 2023
India’s Ministry of Corporate Affairs has reportedly ordered an inspection of the account books of edtech giant BYJU’S. According to a Bloomberg report, the inspection was initiated in response to an internal assessment of the company’s state of affairs. The Ministry has requested a report within six weeks, following which it will decide whether to escalate the matter to the Serious Fraud Investigation Office (SFIO).
SFIO, a multi-disciplinary organization under the Ministry of Corporate Affairs, specializes in investigating financial fraud and corporate misconduct. It comprises experts from various fields, including accountancy, forensic auditing, law, and information technology.
BYJU’S legal advisor, MZM Legal LLP, stated that the company has not yet received any communication from the Ministry of Corporate Affairs. The advisor emphasized that BYJU’S has previously cooperated with routine inspections and would continue to provide necessary explanations and clarifications if a routine inspection takes place.
This development comes amid ongoing challenges for BYJU’S, including conflicts with creditors over a $1.2-billion term loan B. Last week, there were reports of SFIO investigating BYJU’S for alleged compliance failures in financial reporting and governance lapses.
In recent months, BYJU’S has witnessed changes in its board composition and auditing arrangements. Several board members resigned, and Deloitte Haskins & Sells stepped down as the statutory auditors, citing delays in filing financial statements for FY22. BYJU’S CFO Ajay Goel has reaffirmed the engagement with new auditor BDO, aiming to complete the audits for FY22 and FY23 by specified timelines.
The outcome of the inspection will shed light on the state of BYJU’S account books and determine any further actions or investigations required.
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