Audit firm Deloitte has resigned as Byju’s auditor citing delay in submission of financial statements, while almost simultaneously three members of the edtech firm’s board have resigned, in what is seen as a deepening crisis at Decocorn. being seen. Deloitte Haskins & Sells, which was supposed to audit Byju’s by 2025, has pulled out in the mid-term with “immediate effect”, saying “the company’s financial statements are long overdue”.
In a letter sent to the board of Think and Learn Pvt Ltd (known as Byju’s), Deloitte said it has not been able to initiate the audit due to the delay and that this has implications for its ability to “plan”. significant impact”. Design and complete audits according to standards. Byju’s said in a statement that it has appointed BDO as its new auditor, which will help it “maintain the highest standards of financial scrutiny and accountability”.
Separately, sources said three members of Byju’s board, including early backer Peak XV Partners (formerly Sequoia Capital India) MD GV Ravi Shankar, Prosus’ Russell Dressenstock and Chan Zuckerberg’s Vivian Wu, have resigned. . The reasons for the resignation of the directors were not immediately known. Byju’s board now consists of the founding family – chief executive Byju Raveendran, his wife Divya Gokulnath and brother Riju Raveendran.
When contacted, a Byju’s spokesperson said that media reports suggesting resignation of Byju’s board members are pure speculation. “BYJU’S strongly denies these claims and urges media publications to refrain from spreading unverified information or engaging in baseless speculations. Any significant developments or changes within our organization will be shared through official channels and announcements goes.
“We request media outlets to rely on verified sources and official statements for accurate information about BYJU’S,” the spokesperson said. The development comes at a time when the company is dealing with a debt payment issue of US$ 1.2 billion.
Byju’s, which earlier this month defaulted on a USD 40 million due, has sued its lenders over alleged harassment in debt recovery. In a letter to the Byju’s board, Deloitte Haskins & Sells said it will replace Think & Learn’s auditor three years before the end of its contract due to long delays in the edtech firm’s financial statements for the financial year ending March 31. resigning from the post. , 2022, the audit firm said in a regulatory filing.
The edtech firm separately announced that it has appointed BDO (MSKA & Associates) as its statutory auditor for the next five years starting from FY2022. Deloitte said it has repeatedly written to Byju’s Managing Director Byju Raveendran with a copy to the board of directors, but she has not been able to initiate the audit till date and has therefore decided to step down.
“We are not able to comment on the audit as of date. As a result, our ability to plan, design, perform and complete the audit in accordance with applicable auditing standards will be materially impacted. In view of the above, we are tendering their resignation as statutory auditors of the company with immediate effect,” Deloitte Haskins & Sells said in a letter to the Byju’s board.
Deloitte has been working with BYJU’S since 2016 and has been reappointed as the statutory auditor of THINK & LEARN PVT LTD, under the BYJU brand, for a period of five years commencing from 1st April, 2020. Works. The year ending March 31, 2022 has been delayed significantly. As per the Companies Act, 2013, the audited financial statements for the year ended March 31, 2022 were to be placed before the shareholders in the Annual General Meeting by September 30, 2022. ,” Deloitte said.
The audit firm said it wrote an email to Byju’s Managing Director Byju Raveendran, a copy of which was sent to the board of directors on September 30, 2022 and November 5, 2022, and again on November 12, 2022, December 24 . 2022, and a letter dated March 29, 2023 for statutory audit for the year ending March 31, 2022.
The audit firm said it did not receive any communication on the reconciliation of audit report amendments for FY 2021 and the status of audit preparation of financial statements and related documents for FY 2022. Sources with knowledge of Byju’s developments said on condition of anonymity that the company’s audit process was delayed as it waited for a new chief financial officer to take over.
Byju’s new group CFO Ajay Goel joined the company about a month ago and the company is now gearing up to start the audit process from next week. BYJU’S said, “The BDO’s experience as an auditor for BYJU’S subsidiaries ensures his familiarity with the organization’s operations, helping to streamline the completion of the group-level audit in the upcoming quarter.”
BDO will cover the holding company – Think & Learn Pvt Ltd, its material subsidiaries namely Aakash Education Services Ltd as well as the overall group consolidated results. “This comprehensive audit coverage will provide a holistic view of BYJU’S financial performance and ensure transparency across the organization,” BYJU’S said.
It said the selection of BDO as the auditor of BYJU’S was finalized by Goyal after a rigorous selection process. “We have with great confidence selected BDO as our auditor by following a well-structured selection process. His exceptional capabilities and expertise in providing audit services to diverse large scale companies globally make him a very welcome addition to our organization. We are excited to collaborate with them. BDOs have to maintain the highest standards of financial scrupulousness and accountability,” said Goyal.
BDO currently audits companies like ICICI, Cisco, IndusInd Bank etc. and is considered as one of the top five global audit firms in terms of turnover.