India’s corporate affairs ministry last week ordered an investigation into edtech startup Byju’s, TV news channel CNBC-TV18 reported on Friday, further complicating matters for India’s most valuable startup, which lost its shares on Thursday. auditors and three board members.
Citing unnamed sources, the TV channel reported that the ministry was aware of “various corporate governance lapses” at Byju’s.
Ahead of the new probe, the ministry last year asked Byju’s to explain why it had not submitted audited financial figures. India’s anti-crime agency raided three premises of edtech giant Byju’s and its founder Byju Raveendran on Saturday and seized various “incriminating” documents and digital data.
Byju’s came under scrutiny from the government, investors and creditors last year for repeatedly failing to publish its accounts. In September, Byju’s finally published its accounts for the year ended March 2021, revealing revenue figures that were lower than its own forecasts.
The resignation of global giant Deloitte sent shockwaves across the industry on Thursday as Byju’s auditor and three board members of India’s most valuable startup resigned. In a letter to Byju’s board on Thursday, Deloitte said it had yet to audit the edtech giant’s accounts for the year ending March 2022, citing the delay as the reason for its resignation.
The Bengaluru-based startup, also the world’s most valuable edtech company, is tackling a number of challenges. Earlier this month, the company refused to pay $40 million and countersued the lenders. Byju’s said the way its lenders were operating was a “malicious negotiating tactic”. Lenders claim Byju’s has technically defaulted on the loan.
The startup is also cutting about 1,000 jobs in an effort to improve its finances. BlackRock slashed Byju’s valuation by nearly two-thirds to $8.4 billion in late March, TechCrunch first reported.