Crisis-hit edtech giant Byju’s auditor BDO has resigned, according to a CNBC-TV18 report. Complied with all BDO requests except those crossing ethical or legal boundaries, BDO resigned due to Byju’s refusal to backdate reports.
BDO recommended a firm to facilitate this illegal action, according Byju’s statement to CNBC-TV18.
After Byju’s entered IBC, BDO emailed the suspended board on July 17, seeking clarification on historical transactions with a Middle East partner, threatening resignation if not clarified in 45 days.
The auditor said in a statement to the company dated Tuesday that despite “inordinate” delays in filing its financials for the year ended March 2023, management had provided inadequate support to complete the audit.
“We have reasons to believe that the management of the company lacks transparency with respect to providing full information to the auditor for their consideration and evaluation,” BDO wrote in the letter.
Byju’s defended its inability to provide the documents, saying in a statement that BDO had requested the materials from the firm’s board, which has been suspended due to the insolvency proceedings. The letter should have been addressed to the insolvency professional in control of the firm at the time, the edtech firm said.
BDO in its email to the board said it had sought a detailed forensic review of transactions involving a Dubai-based subsidiary.
In its statement, Byju’s called for a forensic audit of BDO’s resignation by the insolvency professional, who was appointed by an Indian court.
BDO was appointed auditor earlier this year after Byju’s former auditor, Deloitte, left the company, citing several issues with the company’s financial reporting.
Backed by General Atlantic, Byju’s was valued at $22 billion in 2022, but it has seen its fortunes plummet due to many regulatory issues and more recently a dispute with U.S. banks demanding $1 billion in unpaid dues, triggering the company’s insolvency, which led to an assets freeze.
Byju’s is fighting several battles including the insolvency proceedings and a $1 billion claim from U.S.-based Glas Trust.
