Byju’s and Aakash auditor Deloitte resigns; new auditor appointed

The Byju’s saga continues to get murkier. Deloitte has resigned as auditor from the edtech unicorn and its affiliate company Aakash Educational Services even as the companies continue to fail to produce their financial statements for the fiscal year ending March 2022, according to regulatory filings reviewed by Entrackr. This failure, among other reasons, has been cited as a key reason for its creditors also beginning to lose faith in the firm and seeking an accelerated return of debts owed.

“We have also not received any communication on the status of audit readiness of the financial statements and the underline books and records for the year ended March 31, 2022 and we have not been able to commence the audit as on date. As a result, there will be a significant impact on our ability to plan, design, perform and complete the audit in accordance with the applicable auditing standards,” said Deloitte in two separate regulatory filings.

“In view of the aforesaid, we are tendering our resignation as statutory auditors of the company with an immediate effect,” said the filings.

Meanwhile, Byju’s has appointed BDO (MSKA & Associates) as its statutory auditors for the year commencing from FY22 for the next five years. 

“Under this appointment, 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 the company in a press release.

The appointment of BDO (MSKA & Associates) as auditor from FY22 to FY27 has come shortly after reports of resignation of GV Ravishankar from Peak XV Partners, Russell Dreidenstock from Prosus, and Vivian Wu- Chan Zuckerberg Initiative from the company’s board started doing the rounds. Byju’s, however, has vehemently denied these reports.

The resignation of this particular set of board members could prove to be a truly massive blow for the firm already reeling from a series of unfortunate incidents, to put it mildly. While it is fast running out of excuses for the media and apparently, its creditors, board members from organisations that have been part of the board for a large part of the journey to unicorn status and beyond will be seen extremely negatively. The Deloitte resignation, coming as it does, does nothing to reassure the most ardent supporters of the founder or his vision. 

Plans considered critical to sustaining and possibly rescuing the firm from its current predicament,  such as the IPO of the largest part of the group, Aakash Educational Services, that was announced recently, could also be in jeopardy with the market regulator due to the rumblings at the parent firm.