In a series of developments, audit firm Deloitte has resigned as the auditor of edtech giant Byju’s, citing prolonged delays in the submission of financial statements. Simultaneously, three board members of Byju’s have also resigned, raising concerns about the company’s current state of affairs. These events come at a crucial time when Byju’s is grappling with a $1.2 billion loan payment issue.
Deloitte Haskins & Sells, which was contracted to audit Byju’s until 2025, announced its resignation, effective immediately, due to the significant delay in receiving the company’s financial statements. The audit firm expressed concerns that the delays would impede their ability to plan, design, and perform an accurate audit in accordance with established standards.
In response, Byju’s released a statement appointing BDO as its new auditor, emphasizing its commitment to upholding high standards of financial scrutiny and accountability. Byju’s expressed confidence that this new partnership would facilitate a comprehensive and transparent audit process.
Coinciding with Deloitte’s resignation, three board members, including GV Ravishankar, MD of Peak XV Partners (formerly Sequoia Capital India), Russell Dreisenstock of Prosus, and Chan Zuckerberg’s Vivian Wu, have stepped down. The reasons for their resignations are currently undisclosed. The Byju’s board now primarily consists of the founder family, including CEO Byju Raveendran, his wife Divya Gokulnath, and his brother Riju Raveendran.
Byju’s spokesperson dismissed media reports speculating on the resignations, labeling them as entirely speculative and urging reliance on verified sources for accurate information.
These developments come amidst Byju’s ongoing $1.2 billion loan payment issue, with the company recently suing its lenders over alleged harassment during the loan recovery process.
Deloitte Haskins and Sells, in a letter to the Byju’s board, highlighted that the resignation was prompted by the prolonged delay in receiving the edtech firm’s financial statements for the fiscal year ending March 31, 2022. The audit firm had sent multiple communications to Byju’s management, expressing concerns about the unresolved audit report modifications for the previous financial year and the readiness of the financial statements for the fiscal year 2022.
Anonymous sources familiar with the matter revealed that Byju’s audit process experienced delays as the company awaited the appointment of a new chief financial officer. With the recent addition of Ajay Goel as the group CFO, Byju’s is now set to commence the audit process in the upcoming week.
Byju’s announced that the selection of BDO as their auditors followed a rigorous selection process conducted by CFO Ajay Goel. BDO’s extensive experience in providing audit services to globally diversified large-scale companies was considered a significant factor in their appointment. The audit coverage will encompass Byju’s holding company, subsidiaries, and consolidated group results, ensuring a comprehensive view of the organization’s financial performance.
As Byju’s strives to address the challenges posed by delayed financial statements and personnel changes, the appointment of BDO as their new auditor signals the company’s commitment to transparency and financial accountability moving forward.
Sources By Agencies