Ministry of Corporate Affairs scrutinises Byju's after auditor quits

By Siddhartha Singh and Saikat Das

India’s company regulator is gathering information about education-technology firm Byju’s after the resignation of its auditor and three board members, according to people familiar with the matter.

The Ministry of Corporate Affairs has sought more information about the embattled startup and a final decision about whether to open a formal probe is expected soon, the people said. The decision to order an inspection and investigation would be based on an assessment of the information, they said.

“The company has not received any communication from the MCA in connection with the resignation of the auditor and related matters,” according to Zulfiquar Memon, managing partner at MZM Legal, which Byju’s said is its legal representative. The ministry didn’t respond to requests for comment.

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The Economic Times earlier reported about an inspection of Byju’s by the corporate affairs ministry, which the company denied having any information about.

For months, Byju’s has been embroiled in disputes with creditors. The company, once emblematic of India’s booming startup scene, has cut thousands of jobs. And in recent days, Byju Raveendran, the billionaire co-founder, has reached out to investors to assure them that long-delayed financial information will soon be released.

Officials at the ministry are checking to see if Byju’s auditor and board members submitted a report to the government about the company at the time of their resignations, the people familiar with the situation said.

Deloitte Haskins & Sells resigned as Byju’s auditor last week, citing a delay in submitting financial statements. Three directors — GV Ravishankar, Russell Dreisenstock and Vivian Wu — also resigned from Byju’s board.