Byju's is currently facing a $1.2 billion loan payment issue, and these recent developments have added to their challenges.
Deloitte, the audit firm responsible for auditing Byju's, has resigned due to the delayed submission of financial statements. Simultaneously, three board members of the edtech firm have also stepped down, further exacerbating the perceived crisis surrounding the company. Deloitte Haskins &Sells, originally designated as Byju's auditor until 2025, decided to resign with immediate effect, citing significant delays in receiving the company's financial statements.
In a letter addressed to the board of Think & Learn Pvt Ltd (operating as Byju's), Deloitte expressed their inability to initiate the audit process due to the prolonged delays, which would significantly impact their ability to adequately plan, design, perform, and complete the audit in compliance with standards.
Byju's responded by stating that they have appointed BDO as their new auditor, emphasizing their commitment to maintaining the highest standards of financial scrutiny and accountability.
Sources have revealed that three board members of Byju's, including GV Ravishankar (MD of early-backer Peak XV Partners, formerly known as Sequoia Capital India), Russell Dreisenstock from Prosus, and Vivian Wu from Chan Zuckerberg, have resigned.
The exact reasons for the directors' resignations remain unknown at this time. Presently, the Byju's board consists solely of the founder family, including CEO Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran.
In response to these reports, a spokesperson from Byju's stated that the media's claims regarding board member resignations are purely speculative. They firmly denied these assertions and urged media publications to avoid spreading unverified information or engaging in baseless speculation. The spokesperson emphasized that any significant developments or changes within the organization would be communicated through official channels and announcements. They requested media outlets to rely on verified sources and official statements for accurate information regarding Byju's.
These recent developments have emerged during a period when the company is grappling with a $1.2 billion loan payment issue.
Byju's, who missed a $40 million repayment earlier this month, has filed a lawsuit against its lenders, alleging harassment during the loan recovery process.
In a regulatory filing, Deloitte Haskins and Sells informed the Byju's board that they are resigning as auditors of Think & Learn, three years prior to the expiration of their contract. The resignation is due to a significant delay in the edtech firm's financial statement for the fiscal year ending on March 31, 2022.
Byju's separately announced the appointment of BDO (MSKA & Associates) as their new statutory auditors for the next five years, starting from the financial year 2022.
Deloitte stated that they had frequently communicated with Byju's Managing Director, Byju Raveendran, copying the board of directors. However, they have been unable to initiate the audit process, leading to their decision to resign.
Due to the ongoing circumstances, Deloitte Haskins &
Sells expressed that the delay would significantly impact their ability to
adequately plan, design, perform, and complete the audit in accordance with
applicable auditing standards. They formally tendered their resignation as
statutory auditors of the company with immediate effect, as stated in their
letter to the Byju's board.
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