The leadership team of BYJU’S is in talks with the investors and trying to convince them to reverse their decision to step down from the board
On Thursday, Inc42 reported that representatives of Peak XV Partners, Prosus, and Chan Zuckerberg Initiative resigned from the board of BYJU’S
Amid mounting troubles, Deloitte also resigned as the statutory auditor of the edtech giant due to the delay in releasing the financial statements for FY22
Update | June 23, 22:20 PM
A day after Inc42 reported about BYJU’S three board members, including GV Ravishankar, MD of Peak XV Partners, resigning 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.
Original Story| June 23, 19:38 PM
Edtech decacorn BYJU’S is reportedly in talks with its investors Peak XV Partners, Prosus, and Chan Zuckerberg Initiative, who quit the company’s board, to reconsider their decision.
Citing sources, Reuters reported that the leadership team of BYJU’S is in talks with the investors and is trying to convince them to reverse their decision to step down from the board.
The development comes a day after Inc42 reported that the three board members of the edtech giant, including GV Ravishankar, MD of Peak XV Partners, Russell Dreisenstock of Prosus, and Vivian Wu of Chan Zuckerberg Initiative tendered their registrations from the company.
These investors were dissatisfied with the way BYJU’S dealt with the issues around its $1.2 Bn Term B loan payment. BYJU’S also missed its payment for the loan and instead sued its lenders over alleged harassment in the recovery of the loan.
BYJU’S and Chan Zuckerberg were not immediately available to respond to Inc42’s query on the latest development. Peak XV declined to comment on the matter. Meanwhile, on Thursday, BYJU’S denied the reports of these investors leaving its board and called it media “speculation”.
Adding to the troubles of the company, Deloitte also resigned as the statutory auditor of BYJU’S due to the delay in releasing the 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.
Acting swiftly, BYJU’S soon after announced the appointment of BDO (MSKA & Associates) as its statutory auditor yesterday.
Amid these issues, a major restructuring is also underway in the company. While reports earlier this week said the edtech giant was in the process of firing another 1,000 employees, Inc42 has learnt that senior-level employees, including senior managers, associate vice-presidents, and vice-presidents, are now being asked to resign or face termination.
Mohandas Pai Slams BYJU’S
This is not the first time that BYJU’S has found itself in a soup. The startup was caught up in controversies earlier as well for various reasons like force selling its offerings, purchasing databases, including phone numbers of children and parents, among others.
However, the situation is more serious this time as the resignation of investors and its auditor has raised questions over corporate governance.
Amid this, Mohandas Pai, chairman and cofounder of Aarin Capital and an early investor of BYJU’S, on Friday said that the edtech major didn’t pay enough attention to corporate governance.
“Byju has not paid enough attention to governance and releasing financial figures in time. If you take money from any investor, you are accountable,” Pai was quoted as saying by Reuters.
“Even if you are a private company, you are still accountable,” he added.
BYJU’S is also backed by the likes of General Atlantic, Silver Lake, BlackRock, and Tiger Global, among several other marquee investors.