Last month, MCA asked its field officers to speed up the inspection process on Byju’s which is in the middle of a corporate battle between its founders and the investors’ group.
The ministry of corporate affairs (MCA) is expected to come out with its inspection report on edtech firm Byju’s in the next few weeks, said an official source. “The investigation on Byju’s was initiated 7-8 months ago, and there’s been a delay in concluding the probe. We are likely to bring out the inspection report in the next few weeks,” an MCA official, who declined to be identified, told FE.
Last month, MCA asked its field officers to speed up the inspection process on Byju’s which is in the middle of a corporate battle between its founders and the investors’ group.
The ministry had ordered inspection of Byju’s books last July after the company’s statutory auditor Deloitte Haskins & Sells LLP resigned citing delays in the submission of financial statements for FY22.
Byju’s is also facing scrutiny by the Financial Reporting Review Board (FRRB) of The Institute of Chartered Accountants of India (ICAI) which is looking into the allegations of financial reporting irregularities at the company.
Recently, Byju’s four investors – MIH Edtech Investments BV, Peak XV Partners Investments, Sofina SA and General Atlantic Singapore TL Pte Ltd – reportedly filed pleas in the apex court requesting to be heard before deciding on any plea challenging the National Company Law Tribunal’s February 28 order that permitted Byju’s to raise $200-million through the rights issue.
From being the most valuable start-up in 2022 with a valuation of $22 billion, Byju’s has been on a slippery slope. Its valuation has dropped by over 99% over alleged financial irregularities, mismanagement, and mounting losses. For instance, its parent company Think & Learn Pvt Ltd reported a consolidated loss of Rs 8,245 crore on operating revenues of Rs 5,014 crore for FY22.
Meanwhile, the investigation on Byju’s has been carried out under the sections 206-209 of the Companies Act that give power to MCA to seek information from company officials, inspect their books and conduct inquiries. In case MCA finds any evidence of a major fraud, its regional office refers the matter to the central government who typically involves the Serious Fraud Investigation Office (SFIO) to probe further.
