The Busy Brains
26 Jun 2023
Deloitte has resigned as auditor from Byju's and Aakash Educational Services due to the companies' failure to produce financial statements for the fiscal year ending March 2022. This has led to concerns among creditors and the appointment of new auditors, BDO (MSKA & Associates).
Deloitte has stepped down as the auditor for edtech unicorn Byju's and its affiliate company Aakash Educational Services, as the companies have failed to produce their financial statements for the fiscal year ending in March 2022, according to regulatory filings.
The inability to provide financial statements, along with other reasons, has eroded confidence among creditors who are now seeking an accelerated return of debts owed.
In regulatory filings, Deloitte stated that they have not received any communication regarding the readiness of the financial statements and the underlying books and records for the fiscal year 2021-2022. They have been unable to commence the audit, significantly impacting their ability to fulfill auditing obligations. As a result, Deloitte has tendered its resignation as the statutory auditors of the companies.
Byju's has appointed BDO (MSKA & Associates) as its new statutory auditors for the fiscal year commencing from FY22 and for the next five years. BDO will cover the holding company, Think and Learn Pvt Ltd, along with its material subsidiaries, including Aakash Education Services Limited, and provide consolidated results for the entire group.
The appointment of BDO (MSKA & Associates) follows reports of board member resignations, including GV Ravishankar from Peak XV Partners, Russell Dreidenstock from Prosus, and Vivian Wu-Chan Zuckerberg Initiative. Byju's has denied these reports. However, the departure of these board members, who have been instrumental in the company's journey to becoming a unicorn, could have a significant negative impact on the firm.
The resignation of Deloitte and the uncertainty surrounding the financial statements and board member departures raise concerns about Byju's current predicament. Critical plans, such as the IPO of Aakash Educational Services, could be jeopardized due to regulatory concerns and the turmoil at the parent firm. These developments have shaken the confidence of the founder's staunchest supporters and pose challenges to sustaining and rescuing the company.