BDO, the auditor for Indian edtech startup Byju’s, has resigned immediately. This is the second time an auditor has left Byju’s in about a year. This raises concerns about the company’s financial health and how it is being managed.
In a harsh resignation letter, BDO subsidiary MSKA pointed out many problems with Byju’s. These include significant delays in reporting finances, not enough support from management, and worries about the company getting back money owed from a business in Dubai.
The auditor leaving comes as Byju’s, which was once India’s most valuable startup valued at $22 billion, faces many challenges. These challenges include a recent decision by the Supreme Court to continue legal proceedings against the company.
Deloitte, Byju’s old auditor, and key board members resigned last year because of management issues. MSKA, who was hired in August 2023 for five years, said in their resignation letter that the company didn’t give them the information they needed to complete their financial audit for 2022-23.
In response, a Byju’s spokesperson said that BDO asked for things that went against the law and what is considered ethical.
MSKA said they have reported potential illegal activities within Byju’s. They also mentioned concerns about lawsuits against Byju’s and its board members, like liquidation proceedings started by lenders and accusations of unfair treatment towards minority shareholders.
The auditor also noted times when Byju’s didn’t share important information, like notifications for company meetings and legal proceedings, with the auditing team.
Byju’s is facing many difficulties, including a drop in its value, missed financial deadlines, less revenue than expected, and disputes with investors. Big supporters like Prosus and Peak XV have accused Byju’s of not being managed well and have tried to take legal action to remove the founder Byju Raveendran.
Recently, Byju’s has faced more problems, with the Indian Supreme Court stopping a previous ruling that put a pause on legal proceedings against the company. U.S. creditors are trying to get $1 billion from Byju’s, putting even more stress on the once-popular startup.
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