Byju's Troubles Mount As Auditor Deloitte Quits Citing 'Long-Delayed' Results
Reports say that three directors of the edtech startup also resigned, but Byju's denies the claims.
Byju's auditor Deloitte Haskins & Sells resigned citing "long delayed" financial statements as troubles continue to mount for the edtech giant facing regulatory and lender pressure.
In accordance with the Companies Act, 2013, the audited financial statements for the year ended March 31, 2022 were due to be laid before shareholders in the annual general meeting by Sept. 30, 2022, Deloitte said in a letter reviewed by BQ Prime. Deloitte didn't receive any communication on the resolution of the audit report modifications, status of audit readiness of financial statements and underlying records for FY21, it said.
"We have not been able to commence the audit as on date. As a result, there will be significant impact on our ability to plan, design, perform and complete the audit in accordance with the applicable auditing standards," Deloitte said. "In view of the aforesaid, we are tendering our resignation...with immediate effect."
Deloitte's five-year term would have ended in March 31, 2025. Byju's appointed MSKA & Associates, the audit arm of the accounting major BDO, as the statutory auditor of holding company Think and Learn and its material subsidiaries such as Aakash Education Services Ltd. as well as the overall group consolidated results for five years starting FY22.
The auditor's resignation adds to Byju's troubles. The startup has had a turbulent past year, with valuation cuts by prominent investors, searches by the Enforcement Directorate, a legal battle with lenders over repayment terms, layoffs, delayed financial results, and funding stuck in limbo.
Byju's said the transition between the auditors was "meticulously planned". "The audit of most subsidiaries has already been completed, setting a positive precedent for the ongoing collaboration with the new auditors," it said.
Byju's results for FY22, like FY21, have been delayed. The Ministry of Corporate Affairs stipulated that unlisted firms file their statements within six months of the financial year closure.
Reports Say Three Directors Quit; Byju's Denies
Several media outlets on Thursday also reported that three key board members of Byju's have resigned, citing differences with the management.
Peak XV's GV Ravishankar, Prosus' Russell Dreidenstock, and Chan Zuckerberg's Vivian Wu have tendered their resignations, according to the reports.
A Byju's spokesperson called these reports "entirely speculative". "Any significant developments or changes within the organisation are shared through official channels and announcements," the company said.
