BENGALURU: Byju’s, already embroiled in financial troubles and insolvency proceedings, has suffered another setback as its auditor BDO resigned amid escalating tensions.
BDO (MSKA & Associates), which had been appointed in June 2023 after Deloitte stepped down citing irregularities, has now followed suit, raising further concerns over the edtech giant’s governance.
BDO had stepped in at a crucial time when Byju’s had already delayed filing its FY22 financials, prompting Deloitte to flag serious discrepancies and eventually resign.
Forensic audit
Despite these challenges, BDO initiated a forensic audit request in July 2024, just one day after Byju’s was admitted into insolvency. Under statutory guidelines, the auditor is permitted to resign within 45 days if not satisfied with the company’s response.
According to internal documents, BDO cited lack of transparency and inadequate cooperation from Byju’s management as reasons for its exit.
Blackmail tactics?
In response, Byju Raveendran, the company’s founder and CEO, accused BDO of unethical behavior, claiming that the auditor’s actions were motivated by inappropriate demands, including backdating documents.
Raveendran’s email to BDO highlighted what he perceived as blackmail tactics, asserting that Byju’s had fully cooperated with BDO’s requests except those that crossed legal or ethical boundaries.
He further criticised the timing of BDO’s resignation, implying that it was suspiciously close to the initiation of insolvency proceedings, and raised concerns about the auditor’s impartiality.
Multiple crises
Raveendran also pointed out that BDO had previously given assurances during a board meeting that no evidence of fraud had been found during their due diligence, adding a layer of confusion to the abrupt resignation.
As the company continues to grapple with multiple crises, including ongoing litigation and efforts to resolve its financial situation, BDO’s exit adds to the growing challenges, particularly in regaining stakeholder confidence.
