SUMMARY
The company has appointed BDO (MSKA & Associates),as its statutory auditors for five years, starting from FY22
Under this appointment, BDO will cover the holding company, its material subsidiaries such as Aakash Education Services Limited, and the overall group consolidated results
The company announced the new appointment after Deloitte tendered its resignation as the auditor of BYJU'S citing the delay in filing financial statements for FY22
After the resignation of its auditor Deloitte, embattled edtech decacorn BYJU’S on Thursday announced the appointment of BDO (MSKA & Associates) as its statutory auditor.
Under this appointment, BDO will cover the holding company – Think and Learn Pvt Ltd, its material subsidiaries such as Aakash Education Services Limited, and the overall group consolidated results.
“This comprehensive audit coverage will provide a holistic view of BYJU’S financial performance and ensure transparency across the organisation,” it said in a statement.
Resignations Galore At BYJU’S
The announcement came soon after BYJU”S statutory auditor Deloitte Haskins & Sells resigned with immediate effect due to the delay in the company’s filing of financial results.
“The financial statements of the company for the year March 31, 2022 are long delayed…we have not received any communications on the resolution of the audit report modifications in the respect of the year ended March 31, 2022, status of the audit readiness of the financial statements and the underlying books and records for the year ended March 31, 2022 and we have not been able to commence the audit as on date,” it said in a statement.
The letter further added that this delay will have a significant impact on their ability to plan, design, perform and complete the audit in accordance with the applicable auditing standards.
Besides, three key board members – GV Ravishankar, MD of early-backer Peak XV Partners (formerly Sequoia Capital India), Russell Dreisenstock of Prosus and Chan Zuckerberg’s Vivian Wu also tendered their resignations, sources told Inc42.
While BYJU’S rejected the reports of resignations of its board members, the sources said that the three board representatives had been mulling exiting the company for the past several weeks due to a breakdown in trust and communication between them and BYJU’S cofounder and CEO Byju Raveendran.
Moreover, there was also dissatisfaction over the way the company dealt with the issues surrounding its $1.2 Bn Term B loan payment.
BYJU’S Many Troubles
It is important to note that the edtech platform released its FY21 financial statements after a delay of nearly 12 months and is yet to file the financial statements for FY22. It reported a loss of INR 4,588 Cr in FY21, a jump of a massive 1,880%, or 19.8X, from INR 231.69 Cr in FY20.
It also skipped paying $40 Mn in interest on a $1.2 Bn term loan B (TLB) and followed it up by filing a case before the New York Supreme Court against one of its lenders.
“… BYJU’S cannot be expected to and has elected not to make any further payment to the TLB lenders, including any interest, until the dispute is decided by the court,” the company said.
The company has undertaken several rounds of mass layoffs. Earlier this week, it set in motion the process for another round of layoffs, which would impact more than 1,000 employees. In October last year, it laid off more than 2,500 employees across multiple subsidiaries.
As per Inc42’s layoff tracker, BYJU’S has fired over 4,000 employees since 2022, excluding the most recent layoffs, amid a business slowdown and mounting troubles.
Besides, the Enforcement Directorate recently conducted search and seizure operations at premises linked to the edtech company in connection with violation of the Foreign Exchange Management Act (FEMA) norms.
Investor BlackRock also cut the valuation of BYJU’S on its books by 62% to $8.4 Bn from $22 Bn earlier.
