[Update] More Trouble For BYJU’S; Three Board Members & Auditor Resign

Update | June 23, 22:25 PM

A day after sources told Inc42 that BYJU’S three board members, including GV Ravishankar, MD of Peak XV Partners, have resigned from its board, the VC firm has confirmed the report.

“We confirm that GV Ravishankar, MD, Peak XV Partners has resigned from the board of Think & Learn Pvt Ltd. We are committed to supporting the company for bringing on board an independent director in order to strengthen business processes and internal control mechanisms,” said a spokesperson at Peak XV Partners.

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Original Story| June 22, 17:13 PM

In another crisis for edtech decacorn BYJU’S, three of its board members, including GV Ravishankar, MD of early-backer Peak XV Partners (formerly Sequoia Capital India), have resigned.

Russell Dreisenstock of Prosus and Chan Zuckerberg’s Vivian Wu have also tendered their resignations, sources told Inc42.

The sources added 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.

There was also dissatisfaction over the way the company has dealt with the issues surrounding its $1.2 Bn Term B loan payment. BYJU’S sued its lenders over alleged harassment in the recovery of the loan.

“He did not take the board’s advice when dealing with recent issues at the company,” one of the sources said.

The development was first reported by Economic Times.

However, BYJU’S rejected the resignations and called the reports ‘speculative’. “A recent media report suggesting the resignations of board members from BYJU’S is entirely speculative,” a company spokesperson said in a statement.

“BYJU’S firmly denies these claims and urges media publications to refrain from spreading unverified information or engaging in baseless speculation. Any significant developments or changes within our organisation are shared through official channels and announcements,” it added.

Meanwhile, BYJU’S auditor Deloitte has also tendered its resignation with immediate effect citing the delay by the startup in filing its financial statements for FY22.

“The financial statements of the company for the year ended March 31, 2022 are long delayed…We have also not received any communication on the resolution of the audit report modifications in respect of the year ended March 31, 2021, status of 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,” Deloitte said in its resignation letter sent to BYJU’S board of directors.

In a separate statement, the startup announced appointing BDO (MSKA & Associates) as its statutory auditors.

The resignation adds to BYJU’S long list of troubles. Recently, the Enforcement Directorate (ED) raided the premises of the company in connection with the Foreign Exchange Management Act (FEMA) probe.

Meanwhile, BYJU’S has also resorted to layoffs to cut costs and turn profitable amid the slowdown in business and rising losses. Earlier this week, it let go of 1,000 employees.

As per Inc42’s layoff tracker, the startup has laid off over 4,000 employees since last year across subsidiaries. 

While the company is yet to file its financial statements for FY22, its net loss surged nearly 20X to INR 4,588 Cr in FY21 from INR 231.69 Cr in FY20. 

Recently, BlackRock also slashed the startup’s valuation by nearly 62% in the quarter ending March this year to $8.36 Bn.