India’s Ministry of Corporate Affairs has ordered an inspection into the multibillion edtech startup Byju’s account books and has sought a report in six weeks. Based on the report, the ministry will decide if the matter needs to be elevated to the Serious Fraud Investigation Office (SFIO). However, the legal firm advising Byju’s said that the company has not received any communications.
“Should a routine inspection take place, Byju’s will be happy to cooperate fully and provide all necessary explanations and clarifications,” Zulfiquar Memon, a managing partner at MZM Legal, told Reuters in an emailed reply. The ministry did not immediately respond to requests for comments.
Byju’s has yet to submit its accounts for the financial year of 2022, which led to resignation of Deloitte as their auditor and even the resignation of a few board members. However, the company has said that it will file the financial statements by September.
Troubles have been mounting for the company after it fell back on its payments to a national payment fund. The company has also been facing flak from public at large due to controversial behaviour to the teachers by the management. There were also questions raised on the ethics of the company during the admission of students and even harassment by the management for the purchase of unnecessary courses and payment of money by the parents. Byju’s was even once ordered to refund the money with compensation of a parent after the company kept delaying her refund and harassed the parent by refusing to give the refund on time. They faced criticism from the public for their controversial selling practices, hiring and misleading claims.
The firm has also been raided by the financial crime-fighting agency over suspected violations of foreign exchange laws and is locked in a legal spat with lenders over restructuring a $1.2 billion term loan.
Byju’s was once India’s most valuable edtech startup with valuation of around $22 billion. It attracted billions of dollars from investors during the Covid-19 pandemic as there was high demand of online education services during that time. Byju’s often came to the limelight during this period and also marketed itself as one of the best edtech brand out there.