Byju’s is facing increasing challenges, with recent developments including the resignation of its auditor due to concerns over transparency, pending legal issues, and other factors. BDO (MSKA & Associates), which was appointed as the edtech giant’s auditor for a five-year term from 2022 to 2027, officially resigned by submitting a letter to the Registrar of Companies (RoC).
Byju’s co-founder, Byju Raveendran, reportedly dismissed the resignation of BDO as a blackmail tactic. In a letter to the auditor, he asserted that the company had complied with all requests made by BDO. The audit firm had requested a forensic audit of Byju’s following the company’s admission into insolvency in July.
In its resignation letter, BDO cited inadequate support from Byju’s management in providing access to the books of accounts, information, and explanations needed to complete the audit for the financial year 2022-23. The auditor stated that they had made multiple requests for audit information through various communications, including emails.
BDO also pointed out that Byju’s has lost control over some of its subsidiaries and no longer has access to their financial records due to ongoing litigation with lenders. Additional concerns included the liquidation process, allegations from shareholders, and a show cause notice issued by the Enforcement Directorate (ED).
Over the past two years, Byju’s has faced multiple corporate governance challenges. The resignation of the auditor after only one year is a significant setback for the company. It is notable that BDO is the second auditor to step down in the last 15 months. In June of the previous year, Deloitte also resigned as the auditor for Byju’s and its affiliate company, Aakash Educational Services, due to delays in the submission of financial statements for FY22.