By India Today Business Desk: The Ministry of Corporate Affairs (MCA) has ordered an inspection of edtech startup Byju’s, citing concerns over corporate governance lapses, reported CNBC-TV18.
The ministry’s move follows recent developments, including Deloitte and three board members severing ties with the company amidst a legal battle with lenders and a decline in valuation.
Deloitte, one of the world’s largest auditing firms, recently resigned as Byju’s auditor with “immediate effect” mid-term due to “long-delayed” financial statements, according to the firm’s resignation letter.
Byju’s has appointed BDO as its new auditor. Three board members from key investors Sequoia Capital India, the Chan-Zuckerberg Initiative, and Naspers Ventures have also resigned from the board, leaving only the founder’s family members on the board.
Byju’s valuation has faced a significant decrease from $22 billion in 2022 to $8.4 billion earlier this year, with concerns arising over governance issues, audit delays, and employee layoffs.
Meanwhile, the edtech start-up is also embroiled in a dispute with lenders over allegations of hiding $500 million, leading to a counter-suit by lender Redwood Management.
Byju’s has not yet responded to requests for comment, and the finance ministry has not provided a statement.