India’s corporate affairs ministry ordered an investigation into edtech startup Byju’s last week, television news channel CNBC-TV18 reported Friday, further complicating matters at the most valuable Indian startup that lost its auditor and three board members on Thursday.
The ministry has taken cognizance of “various corporate governance lapses” at Byju’s, the television channel reported, citing unnamed sources.
The new probe follows the ministry asking Byju’s last year to explain why it hadn’t filed its audited financials. In late April, India’s crime-fighting agency searched three premises of edtech giant Byju’s and its founder Byju Raveendran, it said Saturday, and seized various “incriminating” documents and digital data.
Byju’s attracted intense scrutiny last year from the government, investors and creditors after it repeatedly failed to publish its accounts. In September, Byju’s finally published its accounts for the year ending March 2021, revealing revenue figures that fell short of its own projections.
Global giant Deloitte quit as the auditor of Byju’s and three board members resigned from the startup on Thursday, sending a shockwave through the industry. In a letter to the board on Thursday, Deloitte said that it had not undertaken the auditing of the edtech giant’s accounts for the year ending March 2022 and cited the delay as a reason for its resignation.
The Bengaluru-headquartered startup, also the world’s most valuable education technology company, is grappling with a series of challenges. It refused to make a $40 million payment earlier this month and counter-sued its lenders. Byju’s said its lenders were operating in “bad-faith negotiating tactics.” Lenders allege that Byju’s has technically defaulted on the loan.
The startup is also cutting about 1,000 jobs as it pushes to improve its finances. BlackRock cut Byju’s valuation by nearly two-thirds to $8.4 billion at the end of March this year, TechCrunch first reported.