Byju’s, which is facing several issues, has been embroiled in a fresh controversy as its auditor BDO has resigned with immediate effect, highlighting multiple issues with the troubled edtech company, including significant delays in financial reporting and inadequate administrative support. Last year, Byju’s previous auditor Deloitte resigned, citing governance issues at the company.
In the resignation letter, BDO subsidiary MSKA said there has been “inadequate support from the Company’s management in providing us with the books of account, information and explanations we requested and sufficient and appropriate audit evidence to enable us to complete the audit for the financial year 2022-23.”
In a statement, a Byju’s spokesperson expressed serious concerns about unethical requests made by the auditing firm “and its failure to adhere to proper procedures.”
“The real reason for BDO’s resignation is Byju’s steadfast refusal to retract its reports, while BDO went so far as to recommend a firm that could facilitate such illegal activity.
“There are multiple call recordings where BDO representatives explicitly suggest that these documents be backdated, something Byju’s has refused to do. Byju’s firmly believes that this is the primary reason for its resignation,” the education technology firm said.
Byju’s entered into insolvency proceedings on July 16, 2024, due to a legal dispute with the Board of Control for Cricket in India (BCCI).
This triggered the appointment of an Insolvency Resolution Professional (IRP), which resulted in the suspension of the company’s board.
According to the edtech firm, on July 17, BDO sent an email to the suspended board of Byju’s seeking certain clarifications on the historic transactions that Byju’s had entered into with a Middle East-based partner.
Regarding the transactions with the Middle Eastern partner, “we wish to make it clear that the suspended Board and management of Byju’s had taken the proactive step of arranging a forensic audit, fully transparent and overseen by BDO, to ensure that there were no issues well before their email of July 17,” the edtech firm said.
However, the appraisal could not be carried out due to the start of the insolvency proceedings on 16 July.
Byju’s said that therefore, the failure to complete the forensic examination cannot be attributed to the suspension of the Board of Directors. The company expects the insolvency admission order to be vacated by the Supreme Court very soon.
Byju’s, once India’s most valuable startup with a valuation of $22 billion, is now mired in several controversies.
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