Accounting firm Deloitte has resigned as accountants of Byju’s, citing a delay in filing financial statements, while at almost the same time three of the edtech company’s board members have resigned in what is seen as a deepening crisis in the decacorn.
Deloitte Haskins & Sells, which would conduct the audit of Byju’s until 2025, stepped down prematurely with “immediate effect” stating that “the company’s financial statements are a long time coming”.
In a letter to the board of Think & Learn Pvt Ltd (known as Byju’s), Deloitte said it was unable to initiate an audit due to the delays and that this will have a “significant impact” on its ability to “plan, design, execute the audit and complete it according to standards.
Byju’s said in a statement that it has appointed BDO as its new auditor, adding that this would help “maintain the highest standards of financial oversight and accountability.
Separately, three of Byju’s board members, including GV Ravishankar, MD of early backer Peak XV Partners (formerly Sequoia Capital India), Russell Dreisenstock of Prosus and Chan Zuckerberg’s Vivian Wu have resigned, sources said.
The reasons for the dismissal of the directors were not immediately known. The board of the Byju now consists of the founding family – CEO Byju Raveendran, his wife Divya Gokulnath and brother Riju Raveendran.
When contacted, a Byju spokesperson said media reports suggesting Byju’s board members would resign are entirely speculative.
“BYJU’S firmly denies these allegations and urges media publications to refrain from spreading unverified information or unsubstantiated speculation. All important developments or changes within our organization are shared through official channels and announcements.
“We urge the media to rely on verified sources and official statements for accurate information about BYJUs,” the spokesperson said.
The developments come at a time when the company is facing a $1.2 billion loan payment problem.
Byju’s, which skipped a $40 million repayment earlier this month, has sued its lenders over alleged harassment in trying to recover the loan.
In a letter to Byju’s board, Deloitte Haskins and Sells said it is stepping down as Think & Learn’s auditor three years before its contract expires due to a long delay in the edtech company’s financial statements for the fiscal year ending March 31 . , 2022, the accounting firm said in a registration application.
The edtech company separately announced that it has appointed BDO (MSKA & Associates) as its commissioners for the year from fiscal year 2022 for the next five years.
Deloittee said it regularly wrote to Byju’s general manager, Byju Raveendran, with a copy to the board of directors, but it was unable to start the audit on the appropriate date and so decided to stop.
“We have not been able to comment on the audit to date. As a result, there will be a significant impact on our ability to plan, design, perform and complete the audit in accordance with applicable auditing standards. In view of the foregoing, we are resigning as statutory auditors of the company with immediate effect,” Deloittee Haskins & Sells said in a letter to Byju’s board of directors.
Deloitte has been working with Byju’s since 2016 and has been reappointed as Statutory Auditor of Think and Learn Private Limited, trading under the Byju’s brand name, for a period of five years commencing April 1, 2020.
“The company’s financial statements for the year ended March 31, 2022 have been deeply delayed. In accordance with the Companies Act, 2013, the audited financial statements for the year ended March 31, 2022 had to be submitted to shareholders at the annual general meeting before September 30, 2022.
The accounting firm said it had written an email to Byju’s general manager Byju Raveendran with a copy to the board of directors on September 30, 2022 and November 5, 2022, and then to the board on November 12, 2022, December 24. 2022 and a letter on March 29, 2023 for the statutory audit for the year ended March 31, 2022.
The audit firm said it has not received any communication regarding the resolution of the changes to the audit report for fiscal year 2021 and the audit readiness status of the financial statements and related documents for FY 2022.
Sources aware of the development at Byju’s on condition of anonymity said the company’s audit process was delayed as it waited for a new chief financial officer to take charge.
Byju’s new CFO of the group, Ajay Goel, joined the company about a month ago and the company will now begin the audit process from next week.
“BDO’s experience as an auditor for BYJU’s subsidiaries ensures that they are familiar with the operations of the organization, leading to a streamlined completion of the group-level audit expected to be completed in the coming quarter,” said BYJU’S.
BDO will cover the holding company – Think and Learn Pvt Ltd, its material subsidiaries such as Aakash Education Services Limited, as well as the group’s overall consolidated results.
“This comprehensive audit coverage will provide a holistic view of BYJU’s financial performance and ensure transparency across the organization,” said Byju’s.
It said the selection of BDO as Byju’s auditors was finalized after a rigorous selection process by Goel.
“We have chosen BDO as our accountants with great confidence after a well-structured selection process. Their exceptional capabilities and expertise in providing audit services to globally diversified large-scale companies make them the perfect match for our organization. We are pleased to partner with BDO to maintain the highest standards of financial control and accountability,” said Goel.
BDO currently audits firms such as ICICI, Cisco, IndusInd Bank etc. and is considered one of the top five global audit firms in terms of revenue.
(This story has not been edited by News18 staff and was published from a syndicated news agency feed – PTI)
