Serious Frauds Investigation Office Probes Compliance Failures at Edtech Giant BYJU’S
- ByStartupStory | July 9, 2023
BYJU’S, the leading edtech major, is currently under investigation by the Serious Frauds Investigation Office (SFIO) due to alleged compliance failures in financial reporting and governance lapses. The investigation comes in the wake of Deloitte’s departure as the company’s auditor and the resignation of three prominent Board members amid conflicts over a $1.2-billion term loan B.
The SFIO’s investigation into BYJU’S is an addition to the ongoing review of the edtech company’s financial statements for 2019-20 and 2020-21 by the CA Institute’s Financial Reporting Review Board. These alleged governance and compliance lapses have attracted the attention of investigating agencies, who aim to understand the underlying causes and potential impact on India’s startup ecosystem, even though BYJU’S is an unlisted entity.
In response to queries, BYJU’S legal advisor, MZM Legal LLP, stated that the company is unaware of any discussions regarding the SFIO investigation. It further asserted confidence in its compliance and readiness to address any queries or concerns raised by authorities in a responsible and cooperative manner.
Recent developments within BYJU’S include the proposed establishment of a Board Advisory Committee (BAC) to guide the CEO on board composition and the company’s governance structure. Notably, three key board members, GV Ravishankar from Peak XV Partners, Russell Dreisenstock from Prosus, and Vivian Wu from Chan Zuckerberg Initiative, officially resigned from BYJU’S board last month.
During an extraordinary general meeting (EGM), BYJU’S CFO Ajay Goel confirmed ongoing engagement with newly-appointed auditor BDO for the audit process. The company aims to meet previously communicated timelines, with the FY22 audit targeted for completion by the end of September and the FY23 audit expected to conclude by the end of December. Deloitte Haskins & Sells had stepped down as BYJU’S and Aakash’s statutory auditors, citing the delay in filing the FY22 financial statements.
In FY21, BYJU’S reported a loss of Rs 4,564.38 crore, exceeding its FY20 loss of Rs 305.5 crore.
Follow Startup Story
Related Posts
