BYJU'S targets closing FY22 audit by September; may appoint independent directors to board

In the aftermath of three board members resigning and the departure of Deloitte as its statutory auditor, edtech major BYJU'S is targeting a September deadline to close its FY22 audit. The company is also considering appointing independent directors to its board, a person with direct knowledge of the development told YourStory.

During a call with shareholders on Saturday, BYJU’S Chief Financial Officer Ajay Goel shared that the company also plans to conclude the FY23 audit by December, said the source.

Goel, who was appointed CFO amid a delay in filing the FY22 financials with the Registrar of Companies, noted that he has been working to finalise the audited financials since assuming his position at the company last month, the source added.

Reuters was the first to report the development.

It comes after auditing firm Deloitte Haskins & Sells stepped down as BYJU’S and Aakash’s statutory auditor, attributing the resignation to the delay in the company filing its FY22 financial statements. 

On Thursday, BYJU’S appointed BDO (MSKA & Associates) as its statutory auditor for five years, commencing from FY22. It said that the selection of BDO as its auditors was finalised after a “rigorous selection process” by Goel.

Meanwhile, the edtech firm is dealing with the repercussions of its board members stepping down. Late Friday evening, Peak XV Partners' GV Ravishankar, Prosus's Russell Dreisenstock, and Chan Zuckerberg Initiative's Vivian Wu—three key board members of BYJU'S—officially resigned from the board of the edtech firm.

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BYJU’S initially refuted reports about the resignation of the three board members. However, on Friday, the company acknowledged that "a few investors had to vacate the board seat".

During the call with shareholders, BYJU’S Co-founder and CEO Byju Raveendran clarified that while board members had submitted their resignations, the company had not yet accepted them, said the source.

Raveendran mentioned that “discussions had been ongoing for several weeks regarding the reconstitution of the board to strengthen processes and align with the company's ambitions”. 

The edtech company intends to strengthen its board by incorporating independent directors, the source added.

During the call, Raveendran acknowledged the company's past mistakes and assured shareholders that his learnings far outweigh any missteps, said the person who attended the call.

“Raveendran highlighted his personal investments in the company, including $400 million in the parent company, $250 million for the Aakash acquisition, and an additional $250 million through pledged secondary shares for the last funding round,” the source added.  

He also mentioned that all the secondaries done have been invested back in the company at a $22 billion valuation.

While BYJU’S recently secured $250 million in fresh funding through structured instruments, maintaining a valuation of $22 billion, some investors have valued the company much lower.

The edtech unicorn has been plagued with mounting losses, layoffs, and pending loans after the end of the pandemic-led edtech boom. It is facing challenges in securing substantial funding and resolving conflicts with creditors regarding a $1.2-billion term loan B (TLB). 

In the call, BYJU'S General Counsel Roshan Thomas delivered an update regarding the TLB, expressing that productive negotiations are currently underway and the company remains optimistic about a quick resolution, according to the source.