Byju’s Faces Deepening Crisis: Deloitte Resigns as Auditor, Board Members Quit

In a major setback for edtech giant Byju’s, audit firm Deloitte has resigned as the company’s auditors, citing significant delays in the submission of financial statements. This development coincides with the resignation of three board members, raising concerns about the company’s stability. Byju’s has swiftly appointed BDO as its new auditor, emphasizing its commitment to upholding financial scrutiny and accountability.

Deloitte Haskins & Sells, originally slated to audit Byju’s until 2025, resigned with immediate effect due to the prolonged delay in the company’s financial statements. The audit firm highlighted that this delay would significantly impact its ability to carry out the audit in accordance with standards. Byju’s responded by appointing BDO as its new auditor, signaling a fresh start for the company.

Simultaneously, three board members, including GV Ravishankar, Russell Dreisenstock, and Vivian Wu, have resigned from Byju’s. While the reasons for their departures remain undisclosed, it has left the company with a board composed solely of the founder family: Byju Raveendran, Divya Gokulnath, and Riju Raveendran. Byju’s spokesperson dismissed media reports on the resignations as speculative and urged reliance on official announcements for accurate information.

These developments come at a challenging time for Byju’s, as the company grapples with a $1.2 billion loan payment issue. Byju’s recently filed a lawsuit against its lenders, alleging harassment during the loan recovery process. Amidst this turmoil, Deloitte Haskins and Sells revealed in a regulatory filing that they were resigning as auditors due to the extended delay in Byju’s financial statements for the fiscal year ending March 31, 2022.

To address the auditing needs, Byju’s has appointed BDO (MSKA & Associates) as its statutory auditors for the next five years, starting from the 2022 financial year. Deloitte stated that despite numerous attempts to contact Byju Raveendran and the board, they had not been able to commence the audit, leading to their resignation.

The audit delay was partly attributed to Byju’s waiting for a new chief financial officer to assume the role. With the recent addition of CFO Ajay Goel, Byju’s is now prepared to initiate the audit process from the following week. By selecting BDO as auditors, Byju’s aims to leverage their experience with the organization’s subsidiaries, streamlining the group-level audit, which is expected to be completed in the upcoming quarter.

BDO will oversee the audit of Think and Learn Pvt Ltd, Byju’s holding company, as well as its material subsidiaries, including Aakash Education Services Limited. This comprehensive audit coverage aims to provide a holistic view of Byju’s financial performance, ensuring transparency across the organization. The selection of BDO as auditors was carried out through a rigorous process led by CFO Ajay Goel, who expressed confidence in BDO’s exceptional capabilities and expertise in auditing globally diversified large-scale companies.

BDO is recognized as one of the top five global audit firms in terms of turnover, currently auditing firms such as ICICI, Cisco, and IndusInd Bank.

Byju’s faces a critical period ahead as it navigates the consequences of losing Deloitte as its auditors and managing the resignations of board members. The appointment of BDO signals Byju’s commitment to resolving these challenges and reestablishing trust and stability within the organization.