Shillong, June 23: The Ministry of Corporate Affairs (MCA) has initiated an inspection of the Edtech startup Byju’s, citing apprehensions regarding lapses in corporate governance. This action by the ministry comes in light of recent events, including the departure of Deloitte and three board members, along with a decline in the company’s valuation.
Deloitte, one of the world’s largest auditing firms, resigned as Byju’s auditor “with immediate effect” in the midst of their term. The firm cited “long-delayed” financial statements as the reason for their resignation in their letter. Byju’s has appointed BDO as its new auditor. Additionally, three board members representing key investors such as Sequoia Capital India, the Chan-Zuckerberg Initiative, and Naspers Ventures, have also resigned, leaving only the founder’s family members on the board.
Byju’s valuation has witnessed a significant decline from $22 billion in 2022 to $8.4 billion earlier this year. Concerns have arisen regarding governance issues, delays in audits, and employee layoffs. Furthermore, the company is currently entangled in a legal dispute with lenders over allegations of concealing $500 million, which has resulted in a counter-suit filed by lender Redwood Management.
At present, Byju’s has not responded to requests for comment, and the finance ministry has not issued an official statement regarding the matter.