Byju’s Probe: New investigation against edtech firm Byju’s due to lapses in corporate governance, claims reports
The government has launched a fresh probe into the financial and accounting practices of troubled edtech company Byju’s. According to a Bloomberg report, sources familiar with the matter have said that the new probe was initiated after a previous review by the Ministry of Corporate Affairs revealed lapses in corporate governance at the company.
The regional office of the Registrar of Companies in Hyderabad has been asked to investigate Byju’s financial records. The probe aims to find out if the company has misrepresented its financial statements or misappropriated funds.
This latest investigation follows an inspection conducted by the Ministry of Corporate Affairs a year ago. Although that review found corporate governance problems at Byju’s, no conclusive evidence of financial irregularities was found.
Byju’s, once India’s most valuable startup with a valuation of $22 billion, is now grappling with financial turmoil and legal challenges. The company is embroiled in bankruptcy proceedings in both India and the United States.
In October, India’s Supreme Court overturned a bankruptcy tribunal’s decision that allowed Byju’s to settle its debts with a major creditor. The decision has put the company back into the bankruptcy process, and control of its operations has been handed over to a bankruptcy resolution professional.
The fall in Byju’s shares has hit its investors badly. Major investors, including Prosus NV, have written off their investments. Company founder Byju Raveendran recently acknowledged the company’s collapse, saying its valuation has fallen to zero.
There has been no comment from India’s Ministry of Corporate Affairs and the bankruptcy resolution professional overseeing Byju’s. The company itself has not issued a public statement about the new investigation.
There was a time when Byju’s was celebrated as a success story in India’s fast-growing edtech sector. However, the company has faced increasing challenges, from debt repayment issues to allegations of mismanagement.
