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regular-article-logo Monday, 26 February 2024

Blow to Byju's as auditor Deloitte Haskins & Sells, three directors resign

The audited financial statements for the year…were due to be laid before shareholders in the Annual General Meeting by September 30, 2022, says Deloitte

Our Special Correspondent Mumbai Published 23.06.23, 05:03 AM
Representational image.

Representational image. File photo

Deloitte Haskins & Sells has resigned as the statutory auditor of Byju’s — once ranked as the country’s most valued startup — even as three members reportedly stepped down from its board of directors amid mounting concerns about the edtech giant’s financial health.

Deloitte quit because the company had failed to come out with its financial statements for the year ended March 31, 2022.

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“The audited financial statements for the year…were due to be laid before shareholders in the Annual General Meeting by September 30, 2022,” Deloitte further said.

Deloitte said it had written frequently to Byju’s CEO Byju Raveendran with a copy to the board of directors but had not been able to commence the audit as till date and, hence, decided to resign.

“We have not been able to comment on the audit as on date. As a result, there will be a significant impact on our 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 Haskins & Sells said in a letter to the company’s board.

The three directors who resigned from the board were G.V. Ravishankar of Peak XV Partners (formerly known as Sequoia India and Southeast Asia), Vivian Wu of the Chan-Zuckerberg Initiative, and Russell Dreisenstock of Prosus. In a statement, Byju’s refuted the resignations.

Byju’s said: “A recent media report suggesting the resignations of board members from Byju’s is entirely speculative. Byju’s firmly denies these claims and urges media publications to refrain from spreading unverified information or engaging in baseless speculation.” It also tried to play down the embarrassment from Deloitte’s decision to end its association with Byju’s.

Byju’s, which was once valued at $22 billion, termed Deloitte’s resignation as a “planned transition”, adding that it had appointed BDO (MSKA & Associates) as its statutory auditor for the year commencing from 2021-22 for the next five years.

It said in a separate announcement that under this appointment, BDO will cover the holding company — Think and Learn Pvt Ltd, its material subsidiaries like Aakash Education Services Ltd as well as the overall group consolidated results. The company expects that the comprehensive audit coverage will provide a holistic view of its financial performance and ensure transparency across the organisation.

Deloitte had been re-appointed as statutory auditor of Think and Learn Pvt Ltd for a five-year period starting April 1, 2020.

The audit firm said it had sent an email to Raveendran with a copy to the board of directors on September 30, 2022, and November 5, 2022, and thereafter to the board on November 12, 2022, December 24, 2022, and a letter on March 29, 2023, for statutory audit for the year ended March 31, 2022.

The audit firm said that it did not receive any communication on the resolution of the audit report modifications for the financial year 2021 and the status of audit readiness of the financial statements and related documents for 2021-22.

The company has been waiting to appoint a new chief financial officer — which has been ascribed as one of the reasons for the delay in the audit process.

Last month, Byju’s appointed Ajay Goel who had earlier worked with Vedanta, Diageo, GE and Coca-Cola.

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