India’s Byju’s denies three board members quitting; Deloitte resigns as auditors: Reports

A report by Reuters, citing three sources familiar with the matter, on Thursday (June 22) said that three board members of the Indian ed-tech companyByju’s have quit. Additionally, multiple media reports have also said that Deloitte has stepped down as the company’s auditor due to the delay in the company’s filing of financial results. This also comes amid the company’s reported disagreement with lenders when an investor slashed its valuation.

Three board members of Byju’s decide to step down

A report by Reuters, citing the three sources, said that the board members of Byju’s who quit were – Peak XV Partners’ (previously known as Sequoia Capital India) GV Ravishankar, Prosus’ Russell Dreisenstock and Chan Zuckerberg Initiative’s Vivian Wu.

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However, the three possibly former board members could not be reached by the news agency for comment. Sources told Reuters that the departures mean Byju’s board members now includeonly the founder’s family – Chief Executive Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran.

Byju’s denies reports

Addressing the reports, Byju’s spokesperson called the resignations of the board members “entirely speculative” and denied the claims, as per Reuters. In a statement, the company added, significant developments or changes within the organisation are shared through official channels.

Byju’s auditor Deloitte quits

In the letter addressed to the board members of Think & Learn Private Limited, the parent company of Byju’s, audit firm Deloitte said that the financial statements of the company for the year March 31, 2022, have been "long-delayed"and due to which it is resigning with "immediate effect".

It added, “We have not received any communications on the resolution of the audit report modifications in the respect of the year ended March 31, 2022, the status of the audit readiness of the financial statements and the underlying books and records for the year ended March 31, 2022, and we have not been able to commence the audit as on date,” as quoted by multiple Indian media reports.

The statement also said how this delayhad a “significant impact” on Deloitte’s ability to plan, design, perform and complete the audit in accordance with the applicable auditing standards. “In view of the aforesaid, we are tendering our resignation as statutory auditors of the Company with immediate effect,” Deloitte added.

This comes as Deloitte, one of the world’s largest auditing firms, was supposed to audit Byju’s until 2025. However, Byju’s in a statement, as per Reuters, that it has appointed BDO (MSKA & Associates) as Deloitte’s replacement and that it will help the company “uphold the highest standards of financial scrutiny and accountability.”

BDO is now slated to be Byju’s statutory auditors for the year commencing from FY22 for the next five years.

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