Byju’s, India’s leading edtech startup, is facing significant challenges following the resignation of its auditor, BDO (MSKA & Associates), citing financial and governance concerns. This development comes just over a year after Deloitte, Byju’s previous auditor, also stepped down, raising similar issues with the company’s financial reporting.
BDO’s resignation, outlined in a letter to the company, highlighted several critical issues, including delays in financial reporting, lack of support from management, and concerns about recovering Rs 1,400 crore from More Ideas General Trading LLC, a Dubai-based entity. The transaction was reported to the Ministry of Corporate Affairs on September 2.
Additionally, BDO expressed concerns over ongoing litigation, liquidation proceedings initiated by creditors, and allegations of mismanagement by minority shareholders. The audit firm also noted that Byju’s failed to provide essential information, including notices for extraordinary general meetings and insolvency proceedings.
In response, Byju’s issued a statement emphasizing that it complied with all requests from BDO, except those that crossed ethical and legal boundaries. The company accused BDO of requesting backdating of documents, which Byju’s refused, leading to BDO’s resignation.
This resignation is a significant blow to Byju’s, once valued at $22 billion, as it grapples with mounting financial and legal challenges. The company is under increasing pressure to address these issues and restore stakeholder confidence.
