SUMMARY
ICAI was aware of the issues related to BYJU’S financial disclosures and the probe started not only due to Lok Sabha MP Karti Chidambaram’s request to it to review the alleged issues: Mitra
Last month, Congress MP Chidambaram wrote to the institute to review BYJU’S financial statements
ICAI’s FRRB also looking into the issues around financial disclosures of BYJU’S, said Mitra
Chartered accountants’ apex body Institute of Chartered Accountants of India (ICAI) is probing the financial disclosures made by Indian edtech major BYJU’S amid allegations of irregular accounting practices.
ICAI President Debashis Mitra told news agency PTI that the body was aware of issues related to the startup’s financial disclosures and the probe started not only due to Lok Sabha member Karti Chidambaram’s request to the ICAI to review the alleged issues.
Last month, Congress MP Chidambaram wrote to the institute to review BYJU’S financial statements shortly after the edtech giant reported its FY21 results in September after a long delay. In July, Chidambaram also wrote to the Special Fraud Investigation Office (SFIO) for a probe into BYJU’S finances.
“We don’t see any serious lapses at the company but yes it looks like there are issues around its financial disclosures. The FRRB (Financial Reporting Review Board) is also looking into the matter,” Mitra was quoted as saying by the news agency.
The FRRB was constituted in 2002 as a wing of the ICAI to bring improvements in financial reporting practices and help promote investors’ confidence in audited financial statements. The FRRB reviews enterprises’ general purpose financial statements and auditor’s reports in order to determine their compliance with various aspects.
It is pertinent to note that BYJU’S has been in the spotlight over the last few months for reasons ranging from mass layoffs to spending huge amounts of money on advertising despite the business burning a large amount of cash.
BYJU’S reported a 1,880% rise in its loss to INR 4,588 Cr in FY21 from a loss of INR 231.69 Cr in FY20. It also posted a 3.3% decline in its total income to INR 2,428.3 Cr in the same year.
On the other hand, its total expenses jumped 144.5% to INR 7,027.4 Cr in FY21 from INR 2,873 Cr in the prior fiscal, hurt by heavy marketing and acquisition costs.
After several lay-off exercises earlier this year both at BYJU’S and its subsidiaries WhiteHatJr and Toppr, the edtech unicorn last month announced firing 2,500 employees, or around 5% of its workforce.
Labour unions have accused the edtech giant of violating labour laws and are mulling legal action against it.
Last month, BYJU’S decided to shut down its Thiruvananthapuram office in Kerala as part of its ongoing restructuring exercise. However, it decided against it after a meeting between CEO Byju Raveendran and Kerala Chief Minister Pinarayi Vijayan.
Meanwhile, ahead of the FIFA World Cup 2022, for which BYJU’S is an official sponsor, the startup roped in prominent football player Lionel Messi as a global brand ambassador for its social impact arm, Education For All. The startup received severe criticism for this.
On the other hand, BYJU’S is reportedly also in discussions with private equity group TPG for raising funds between $250 Mn-$300 Mn.
