Ministry Of Corporate Affairs Questions BYJU’S On Delay In Filing Financial Results

The Ministry of Corporate Affairs has asked BYJU’S, the edtech major, to give reasons for the delay in filing the audited financial statements for FY21.

This comes after media reports emerged 10 days ago that the edtech giant was set to release its statements ‘within a week’, as its auditor Deloitte had completed auditing the financial statements.

A Moneycontrol report citing sources said that the ministry had written to BYJU’S earlier this month to explain the delay of almost a year and a half in filing its audited financial statements.

According to the reply sent to the MCA by BYJU’S, the delay in filing is because the edtech major is consolidating accounts of the companies it acquired during the accounting year. During FY 2020-21, the edtech major made three major acquisitions, WhiteHat Jr for $300 Mn, Scholr for $180 Mn and LabinApp for an undisclosed amount.

Another reason for the delays is said to be the disagreements between the auditor Deloitte and the edtech major. The auditor allegedly wanted clarity on how the edtech company computes its revenues to arrive at proper figures for the fiscal, per various media reports.

However, during FY 2021-22, the edtech major made several huge acquisitions, including a billion-dollar deal where it acquired offline test prep major Aakash Educational Services Limited (AESL). BYJU’S has made another billion-dollar bid to acquire US-based listed edtech major 2U, to enable it to list in the US via a SPAC entry.

Apart from Aakash, during the FY22 fiscal year, the edtech major has acquired Singapore-based Great Learning for $600 Mn, Toppr for $150 Mn, US-based reading platform Epic for $500 Mn, US-based Tynker for $100 Mn and Whodat, GradeUp, HashLearn and Austria-based GeoGebra for an undisclosed sum.

Hence, the edtech major acquired eight companies during FY22 for an eyewatering sum exceeding $2.3 Bn, or about 10% of its total valuation. The edtech major last raised $800 Mn in a funding round in March, which saw participation from the cofounder Byju Raveendran, who accounted for half of the total funding amount.

It is prudent to mention here that BYJU’S is facing the heat for its financial practices.

Karti Chidambaram, a Lok Sabha MP, called the delays a ‘violation’ of Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014. Chidambaram also sought a probe from the Special Fraud Investigation Office (SFIO) into the finances of the edtech major.

According to its last financial reports, filed for FY20, BYJU’S made a net profit of INR 51 Cr and revenue of INR 2,434 Cr.