Byju’s says it has not received any communication from the Ministry of Corporate Affairs (MCA) after a report said that the Indian government had ordered a probe into the account books of the edtech company.
“I can confirm Byju’s has not yet received any communication from the MCA. They [Byju’s] have previously provided appropriate explanations and clarifications to the MCA during routine inspections. Should a routine inspection take place, Byju’s will be happy to cooperate fully and provide all necessary explanations and clarifications,” Zulfiquar Memon, legal advisor of Byju’s and managing partner of MZM Legal, said in a statement.
If true, the move will further rub salt in Byju’s wounds as the edtech company is already grappling with multiple challenges, including the loan default lawsuit, probe by the financial investigating agency, and more recent resignations of board of directors and statutory auditors.
It’s worth noting that the report of Byju’s facing a government probe has been doing the rounds for a while. Just last week, a report suggested that the company may face an investigation as the MCA is contemplating engaging the Serious Fraud Investigation Office (SFIO) to scrutinise the resignation of its auditor and the delayed financial reporting by the company. Byju’s, however, has denied that too.
In June, a CNBC report said that the MCA ordered an inspection of edtech startup Byju’s, citing concerns over corporate governance lapses. However, the company also denied any such development then.
Recently, three board members at Byju’s –GV Ravishankar from Peak XV Partners, Russell Dreidenstock from Prosus, and Vivian Wu- Chan Zuckerberg Initiative resigned due to differences with the management of the Bengaluru-based edtech firm. Significantly, the company also denied this firmly initially but later spokespersons of the aforementioned investors confirmed their resignations.
This was followed by resignation of Deloitte as auditor from the edtech unicorn and its affiliate company Aakash Educational Services. The company then appointed BDO (MSKA & Associates) as its statutory auditors for the year commencing from FY22 for the next five years.
Amid all the turmoil, a Delaware court in the US denied a request by Term Loan B lenders of edtech company Byju’s to investigate the matter of $500 million transfer from the company’s US-based subsidiary Byju’s Alpha to other entities. The decision came as a sense of relief for the company which has been looking to raise a larger round for a long time.