Indian ed-tech giant Byju’s, known for its popular online and offline tutorials, has informed investors that it will submit audited earnings for 2022 by September and 2023 results by December, according to Reuters. This comes in the wake of the company losing its auditor, Deloitte, due to “long-delayed” financial filings for the year ended March 2022. Notably, board members representing Peak XV Partners (formerly Sequoia Capital India), Prosus, and Chan Zuckerberg Initiative have also resigned without disclosing their reasons publicly.
These resignations pose significant challenges for Byju’s, which was valued at $22 billion last year and counts General Atlantic among its investors. The departures raise concerns about the company’s corporate governance, especially following a recent raid on Byju’s premises for alleged violations of foreign exchange laws.
To address investor concerns regarding financial matters, Byju’s founder Byju Raveendran, and CFO Ajay Goel held a briefing for approximately 75 shareholders on Saturday. As per reports, Goel stated that Byju’s would provide audited results for 2021-22 to Indian regulators by September and 2022-23 earnings by the end of the year.
Deloitte’s decision to sever ties with Byju’s stems from the company’s failure to provide financial data despite repeated requests. As a result, Byju’s has appointed BDO as its new auditor.
Additionally, Byju’s is reportedly asking three global investors to reconsider their resignations from the board. These board members resigned collectively after expressing concerns about audit delays and the company’s handling of lender-related issues in recent months.
In response to the resignations, Byju’s has assured investors that it is actively working to add more independent directors to the board. Peak XV Partners, one of the departing investors, has stated that it will support Byju’s in strengthening business processes and internal control mechanisms.
Byju’s witnessed significant growth during the pandemic, with a surge in interest in its online tutorials catering to children and offline coaching for engineering aspirants. Its valuation skyrocketed from $5 billion in 2020 to $22 billion in 2022. The company has also pursued billion-dollar acquisitions as part of its expansion plans globally and in various segments.
However, earlier this year, BlackRock, a minor shareholder, slashed Byju’s valuation to $8.4 billion. The company has faced challenges in terms of governance issues, audit delays, and cost-cutting measures that led to layoffs of thousands of employees over the past year.
The developments surrounding Byju’s, including the loss of its auditor and the resignation of key board members, highlight the importance of addressing corporate governance concerns and restoring confidence among investors. Byju’s commitment to submitting audited financial results and appointing new independent directors reflects its efforts to regain trust in the wake of recent challenges.
