Deloitte Consulting departed as BYJU’S auditor due to delays in filing financial statements.
To reassure investors, BYJU’S confirmed it would submit audited financial statements for FY 2022 by September. Around 75 shareholders were provided with a briefing by the edtech giant’s leadership, including founder Raveendran and CFO Ajay Goel.
Concerns surrounding the company’s financial affairs prompted the briefing session with shareholders. Reuters reported that the edtech giant intends to submit FY 2023 results by December.
For five years beginning in FY22, BYJU’S has appointed BDO (MSKA & Associates) as its statutory auditor. The selection of BDO as auditors was determined through a thorough process overseen by Goel.
Ajay Goel was appointed CFO by the edtech giant in April during a delay in filing FY22 financials.
Employment cuts at BYJU’S
As BYJU’S faces increasing losses and pending loans, employees are experiencing low morale.
Many employees actively seek alternative job opportunities due to fear of unexpected job losses. The edtech giant has initiated another round of job cuts, impacting more than 1,000 people, as reported by YourStory.
The job cuts coincide with the firm’s financial challenges and low employee intent. A source close to the company confirmed the workforce reduction move.
The Deloitte Matter
Deloitte, one of the Big Four accounting firms, has officially stepped down as BYJU’S statutory auditor. They attributed its resignation to the delay in filing FY22 financial statements by the edtech giant.
The company failed to communicate a resolution on audit report modifications and audit readiness for FY21 and FY22.
Deloitte noted the impact on their ability to perform the audit and tendered their resignation.
Deloitte Haskins & Sells was previously appointed as statutory auditors of Think & Learn Private Limited, the parent company of BYJU’S.
Board Members of BYJU’S Resign
Deloitte’s decision to step down as statutory auditor coincides with reports of three board members resigning. The board members resigned due to disagreements with BYJU’S founder on critical operational matters.
According to The Economic Times, GV Ravishankar, Russell Dreisenstock, and Vivian Wu have resigned from BYJU’S. As mentioned in the report, the resignations are yet to be accepted by BYJU.
BYJU’S spokesperson denies the media report, stating it is speculative and unverified. The spokesperson appeals to media outlets not to disseminate unverified information or indulge in unfounded speculation. The response from the company indicates their stance and denial of the reported resignations.
The resignations of the board members have sparked discussions and raised questions about the company.
Losses and Hurdles Increase the Edtech Giant
The edtech giant reported a loss of Rs 4,564.38 crore in FY21, exceeding the FY20 loss. The company’s financial difficulties and delayed filings have raised concerns and led to significant developments.
The resignation of Deloitte and board members and the reported loss pose challenges for BYJU’S. It has undergone changes in its financial team and faces mounting troubles in the edtech industry.
In FY21, BYJU’S incurred losses of Rs 4,564.38 crore, significantly surpassing its loss in FY20. The edtech firm faces the repercussions of board members resigning and legal battles concerning a TLB. Their board members resignations coincide with the edtech company’s challenges related to a $1.2-billion TLB.
The losses incurred in FY21 are significantly higher compared to the previous fiscal year. The edtech giant is currently grappling with financial difficulties, legal battles, and the departure of key board members.
Ajay Goel’s Promise
During the briefing, Goel reiterated the company’s intention to submit audited results for FY22 by September. According to the report, Goel assured investors that earnings for FY23 will be submitted by December. The report added that Goel reassured investors while reiterating the company’s submission plans.
