In what can be termed a new event of déjà vu for the embattled Indian edtech giant Byju’s, BDO has resigned as an auditor of the company with immediate effect. This is for the second time in less than a year that an auditor has parted ways with the company, raising further questions on the company’s financial health and governance practices. Byju’s, once valued at $22 billion, today struggles with ongoing bankruptcy proceedings, litigation, and internal disputes.
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BDO’s subsidiary, MSKA, had cited grave reasons for their resignation letter such as delay in financial reporting and insufficient management support. They also showed apprehension over the capability of the company to realize huge dues from an Abu Dhabi-based group firm. Deloitte, the previous auditor, also resigned last year owing to similar governance issues, signaling further deepening crisis within the company.
Overview
MSKA, appointed as auditor in August 2023 for a period of five years, said, “Inadequate support from the management of the company is received for providing books of account and audit evidence required for the Financial Year 2022-23.” The firm further mentioned the continued litigation and liquidation proceedings filed by the lenders as other factors for their resignation.
Byju’s spokesperson countered this by charging BDO with demanding unethical actions on the part of backdating reports, which the company refused to do. Byju’s had said the refusal to oblige the auditor on this was the principal cause for the resignation of BDO. This is the recent auditor exit for Byju’s; the firm has been battling multiple crises, including a Supreme Court ruling in August to restart insolvency proceedings.
The U.S. creditors also sought to recover $1 billion from the firm, adding more pressure on the beleaguered startup.
