The probe, initiated by the Ministry of Corporate Affairs, comes amid allegations of financial reporting compliance failures and governance lapses. However, Byju denied receiving any communication from the Ministry regarding the investigation.
The probe, initiated by the Ministry of Corporate Affairs, comes amid allegations of financial reporting compliance failures and governance lapses. However, Byju denied receiving any communication from the Ministry regarding the investigation.
Indian edtech giant Byju’s is facing significant challenges as regulatory scrutiny and board member departures add to the troubles of a company already struggling with a falling valuation and internal restructuring efforts.
In latest developments, the Indian government has ordered an inspection into the account books of Byju’s, following the resignation of its auditor, Deloitte Haskins and Sells, as well as board members GV Ravishankar, Russel Dreisenstock, and Vivian Wu.
This probe, initiated by the Ministry of Corporate Affairs, comes amid allegations of financial reporting compliance failures and governance lapses. However, Byju, through its legal representative, Zulfiquar Memon, denied receiving any communication from the Ministry regarding the investigation.
This regulatory inquiry coincides with Byju’s embarking on restructuring efforts following a drop in its valuation. Once valued at $22 billion, the company is now valued at $5.1 billion, marking a sharp 77-percent decrease. This devaluation has resulted in Byju’s founder Byju Raveendran losing his place in the billionaires’ club. His net worth is currently estimated at $475 million, a significant fall from his previous fortune of $3.6 billion.
These financial difficulties have led to an aggressive round of cost-cutting, with thousands of jobs being axed. The company is also seeking to raise over a billion dollars to weather its financial challenges.
Furthermore, Byju’s faced serious criticism for its rapid expansion and lack of proper financial governance. The firm didn’t have a chief financial officer for over a year, and it hasn’t filed its financial results for the year that ended on March 31, 2022.
Acknowledging the missteps, Raveendran has taken steps to bring about organizational changes. In a recent extraordinary general meeting, he announced the formation of a Board Advisory Committee, consisting of independent directors tasked with providing advice on board composition and governance structure.
Despite the challenges, Byju’s has shown no sign of halting its ambitious growth plans. The company is reportedly planning an initial public offering for Akash, one of its acquisitions, by mid-2024.
