The corporate affairs ministry ordered the inspection of BYJU’S citing concerns over corporate governance lapse
Last year, MCA asked the edtech major to give reasons for the delay in filing the audited financial statements for FY21
On Thursday, BYJU’S former statutory auditor Deloitte Haskins & Sells resigned with immediate effect due to the delay in the company’s filing of financial results
As troubles pile up for edtech decacorn BYJU’S, the ministry of corporate affairs (MCA) reportedly ordered an inspection of the edtech firm last week.
The ministry ordered the inspection citing concerns over corporate governance lapses, CNBC TV-18 reported.
“Media reports suggesting that MCA has ordered an inspection into BYJU’S are speculative, and denied by us. We have not received any such correspondence from MCA regarding this, and are not aware of any such inspection,” a BYJU’S spokesperson said.
Last year, MCA asked the edtech major to give reasons for the delay in filing the audited financial statements for FY21. The ministry had written to BYJU’S to explain the delay of almost a year and a half in filing its audited financial statements.
Now, BYJU’S again comes under government scanner at a time when it is reeling under many pressures. On Thursday, BYJU’S former 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.
Following the resignation, the edtech major announced the appointment of BDO (MSKA & Associates) as its statutory auditor. As per the appointment, BDO will cover the holding company, its material subsidiaries such as Aakash Education Services Limited, and the overall group consolidated results.
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.
Moreover, top level employees, including senior managers, associate vice-presidents, and vice-presidents, are allegedly being asked to resign or face termination, Inc42 reported.
Further, 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.
( The copy has been edited to add BYJU’S statement)