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Govt initiates inspection of BYJU’S' account books: Report

The Ministry of Corporate Affairs has reportedly requested a report within six weeks, initiating the inspection in response to an internal assessment of BYJU'S state of affairs.

Govt initiates inspection of BYJU’S' account books: Report

Tuesday July 11, 2023 , 2 min Read

Edtech major BYJU'S is reportedly facing an inspection of its account books following a government order.

According to a Bloomberg report, the Ministry of Corporate Affairs (MCA) has requested a report within six weeks, initiating the inspection in response to an internal assessment of the edtech firm’s state of affairs.

After the inspection's findings, the government will determine whether to escalate the matter to the Serious Fraud Investigation Office (SFIO), the report added.

SFIO, a multi-disciplinary organisation under MCA, comprises experts in accountancy, forensic auditing, banking, law, information technology, investigation, company law, capital markets, and taxation fields.

BYJU'S legal advisor, MZM Legal LLP, said the company has not yet received any communication from the MCA.

"They have previously provided appropriate explanations and clarifications to the MCA during routine inspections," it said, responding to YourStory’s queries.

"Should a routine inspection take place, BYJU'S will be happy to cooperate fully and provide all necessary explanations and clarifications," it added.

This development follows ongoing troubles at the edtech company amid conflicts with creditors over a $1.2-billion term loan B.

Last week, The Hindu Business Line reported that BYJU’S was under investigation by SFIO regarding alleged compliance failures in financial reporting and governance lapses.

These reports have come a few days after BYJU’S proposed the establishment of a Board Advisory Committee (BAC) to guide the CEO regarding Board composition and the governance structure of the company, during an extraordinary general meeting (EGM). 

Last month, three crucial board members of BYJU'S, including Peak XV Partners' GV Ravishankar, Prosus' Russell Dreisenstock, and Chan Zuckerberg Initiative's Vivian Wu, formally resigned from their positions with the edtech firm. Additionally, Deloitte Haskins & Sells, the statutory auditors for BYJU'S and Aakash, officially stepped down, citing the company's delay in filing its financial statements for FY22.

During the EGM, BYJU'S CFO Ajay Goel reaffirmed the engagement with the newly-appointed auditor BDO, aiming to complete the FY22 audit by the end of September and the FY23 audit by the end of December.


Edited by Affirunisa Kankudti