A report by Bloomberg News citing people familiar with the matter, on Tuesday (July 11) reported that the Indian Ministry of Corporate Affairs (MCA) has ordered an inspection into the ed-tech startup Byju’s accounts over alleged governance lapses and compliance failures.
Indian government to probe Byju’s accounts?
The report by Bloomberg citing sources also said that the ministry had sought a report on the Indian ed-tech startup in six weeks. The decision to escalate the matter to the Serious Fraud Investigation Office (SFIO) will be based on the findings of the inspection, the report added.
CNBC-TV18, on Monday, citing ministry sources reported that the company, as of now, is not facing any investigations by the SFIO. But the matter is being probed by the ministry, the report added. The matter will reportedly be taken up with the SFIO following the ministry probe into Byju’s alleged financial reporting compliance failures and governance lapses.
This comes days after a report by The Hindu Business Line, citing an anonymous source, said that the SFIO, a multi-disciplinary organisation which operates under MCA, has already launched an investigation into Byju’s case.
In a statement to Mint, following the recent reports, Byju’s said it has “not received any communication from the SFIO to date.” Meanwhile, the ed-tech start-up has reportedly decided to create a Board Advisory Committee (BAC) to handle the corporate governance issues.
What happened so far?
The recent reports come amid mounting trouble for the Indian company after three of Byju’s board members stepped down, its auditor Deloitte quit over pending financial statements, and the ed-tech start-up reportedly fell behind on its delayed provident fund payments to the Employees’ Provident Fund Organisation.
In the letter sent to Byju’s parent company Think & Learn Private Limited last month, about quitting with “immediate effect,” Deloitte, one of the world’s largest auditing firms, said that the company has not submitted financial statements for 2022.
However, a person with direct knowledge of the matter told Reuters that the company has told its investors that it would file them by this September.
A report by Moneycontrol, on June 26, citing the data sourced from EPFO, said that the company has been making delayed PF payments since October last year.
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