Indian education technology giant Byju’s is facing a fresh string of challenges as its main auditor called it quits and three independent board members tendered their resignations.
The latest setbacks add to the company’s ongoing struggles with creditors, legal actions, and a financial dry spell.
Deloitte Haskins & Sells, the accounting firm overseeing Byju’s parent company Think & Learn Pvt. Ltd’s books over the past six years, abruptly resigned on Thursday. The accounting firm’s tenure was to end in March 2025.
Deloitte said in the letter that the resignation was due to the protracted delay in receiving the financial statements for the fiscal year ending 31 March 2022.
The accounting firm had taken on the audit responsibilities for Byju’s subsidiaries, Aakash Educational Services Ltd and Aakash EduTech Pvt. Ltd, just a year ago.
Think & Learn, reacting swiftly, appointed BDO (MSKA & Associates) as its new statutory auditor for the company and its subsidiaries.
In its resignation letter, Deloitte referred to five correspondences it had with Byju’s founder and managing director, Byju Raveendran, and other board members regarding the audit for the fiscal year to March 2022.
Deloitte said there was no communication regarding resolving issues with the previous year’s financial statements or the readiness of books for the current year.
Byju’s eventually submitted the report for FY21 in September 2022 after an 18-month delay.
Deloitte had earlier expressed concerns regarding Byju’s internal financial controls and raised questions on the company’s revenue recognition practices.
In another development, three independent directors on the board of Think & Learn tendered their resignations earlier this month. The directors are representatives of investment firms Peak XV (previously Sequoia Capital), Chan Zuckerberg Initiative (CZI), and Prosus Ventures.
“Prosus confirms that Russell Dreisenstock, the representing board director from MIH Edtech Investments, B.V. (a Prosus entity) on the board of Think & Learn, resigned from his position. The company is required to file the resignation letter with the MCA (ministry of corporate affairs) in India within the required time period,” Prosus Ventures said in a statement.
A spokesperson for Peak XV Partners confirmed that Ravishankar, managing director, Peak XV Partners, quit the board.
“We are committed to supporting the company for bringing on board an independent director in order to strengthen business processes and internal control mechanisms,” the spokesperson said.
A spokesperson for Chan Zuckerberg Initiative said, “We confirm that Vivian Wu of the Chan Zuckerberg Initiative has resigned from the board of Think & Learn Pvt. Ltd.”
Spokespeople for Byju’s did not respond to an email seeking comment.
Byju’s last managed to secure $250 million in debt funding from Davidson Kempner Capital Management in May and has been attempting to gather additional equity funding from investors.
Investment firms Blackrock and T Rowe Price have adjusted the valuation of their investments in Byju’s downward. Prosus valued Byju’s at $6 billion in November 2022, unchanged since its initial investment.
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