Byju’s Faces New Probe Over Financial, Accounting Practices
India has initiated an investigation into the financial and accounting practices at Byju’s, one of its prominent online tutoring firms. This step has been taken following indications of corporate governance lapses found in a previous inspection, as shared by individuals familiar with the situation.
The federal authority has tasked the regional office of the Registrar of Companies in Hyderabad with the examination of Byju’s financial documentation. The aim is to determine whether there are any discrepancies in the company’s financial statements or if there has been any misappropriation of funds, according to these sources, who have requested anonymity due to the confidential nature of the matter at hand. The registrar’s office is expected to present its findings within one year.
Once considered India’s most valued startup, Byju’s is currently navigating significant challenges in legal disputes both within India and in the US. The struggling firm faced a setback when India’s top court overturned an order from a bankruptcy tribunal. This order had previously allowed Byju’s to settle debts with a significant creditor, thus bringing the company back into insolvency proceedings. The company, headquartered in Bangalore, is now presenting its case in a lower court, and the management of the firm is currently under the jurisdiction of an insolvency resolution professional.
Efforts to reach the spokespersons for India’s Ministry of Corporate Affairs and the insolvency resolution professional for comments were unsuccessful, as emails sent to them went unanswered.
This investigation comes on the heels of a yearlong review by the Ministry of Corporate Affairs, which earlier discovered lapses in corporate governance at Byju’s. However, this prior inspection did not uncover any specific evidence of unlawful activities.
Byju Raveendran, the founder of the company, has made a startling revelation stating that despite its previous valuation of $22 billion, Byju’s current valuation stands at zero. Moreover, some of the company’s major investors, including firms like Prosus NV, have decided to write off their investments in Byju’s, indicating the mounting challenges facing the online education giant.
