ICAI Refers BYJU’S Case To Disciplinary Committee Over Financials

BYJU’S finds itself in more hot water as the Institute of Chartered Accountants of India (ICAI) has reportedly referred the matter concerning the edtech decacorn to its disciplinary committee.

ICAI’s Financial Reporting Review Board (FRRB), which was looking into BYJU’S financial statements has flagged certain issues, Business Standard said in a report citing sources, which the disciplinary panel would examine.

FRRB can review the general purpose financial statements and auditor’s reports of companies in India. As such, the review board has examined BYJU’S balance sheet, profit and notes on account among other things.

If the panel finds the auditor guilty of professional misconduct, it can impose a fine of up to INR 5 Lakh on the auditor and even ban them in egregious cases. ICAI can take action against the auditor under the Chartered Accountants Act but not against the audit firm.

That is relevant since In June, Deloitte Haskins & Sells resigned as the statutory auditor of the edtech giant. The US-headquartered auditor cited the failure of the edtech startup to release the audited statements for the financial year ending March 31, 2022, as the reason for its decision.

Inc42 has approached BYJU’S on the matter and the story will be updated as and when the company responds.

Delays In Financials Continue To Haunt BYJU’S

Besides Deloitte’s resignation over the matter, the continued delay in filing financials has also led to BYJU’S coming on the ICAI radar. The Ministry of Corporate Affairs (MCA) has reportedly opened an investigation against the edtech as well.

The edtech giant, in a recent board meeting, assured its investors that it would submit its audited financial statements for FY22 by September 2023 and gave a timeline of December 2023 for filing FY23 financials. 

BYJU’S had operated without a CFO from December 2021 to April 2023, before hiring former Vedanta Resources executive Ajay Goel. At the June 24 board meeting, CFO Goel and CEO Byju Raveendran assured a group of 75 investors of the timelines for filing the financials.

In FY21, the edtech giant reported a loss of INR 4,588 Cr, 19 times more than the previous financial year, against an income was INR 2,428 Cr. BYJU’S had filed the financials for FY21 after a delay of around 18 months and amid much regulatory pressure from the MCA.

Delays in financials have also prompted Peak XV Partners to consider slashing the edtech giant’s valuation. Peak XV also cited a lack of visibility into the company’s audited financials for FY22 and FY23 as a factor for taking ‘corrective measures’ in its BYJU’S investments.

BYJU’S has been fighting a war on multiple fronts, including a legal tussle with its lenders which has now been sorted, resignations of its directors and investigations from government authorities. Amid an ongoing cash crunch, the edtech also vacated some offices in Bengaluru.

Recently, media reports have also indicated a power struggle at BYJU’S crown jewel Aakash between the edtech and lender Davidson Kempner. While the former rubbished the reports, the latter declined to comment on the matter when approached by Inc42.