Byju’s, the once high-flying Indian edtech startup, has lost another auditor in the midst of its ongoing bankruptcy proceedings. BDO, the company’s auditor, has resigned with immediate effect, marking the second auditor exit within a year and further raising concerns about Byju’s financial stability and governance practices.
In a resignation letter, BDO’s Indian subsidiary, MSKA, highlighted significant delays in financial reporting, a lack of adequate management support, and doubts about the startup’s ability to recover substantial debts from a Dubai-based firm. The resignation comes as Byju’s, previously valued at $22 billion, grapples with mounting legal and financial challenges.
This departure follows the resignation of Deloitte last year, which stepped down citing similar governance issues, alongside the exit of several key board members. MSKA took over in August 2023 under a five-year agreement but expressed serious concerns in its resignation letter. The firm stated that they faced obstacles such as inadequate access to accounting records and insufficient audit evidence to complete the financial review for the fiscal year 2022-23.
Byju’s responded to the resignation, alleging that BDO had made unethical demands, including backdating documents—something the company claims it refused. A spokesperson asserted that the firm has multiple call recordings where BDO representatives explicitly proposed this action.
MSKA also revealed that they had filed Form ADT 4, signaling potential fraud or illegal activity within the company. Byju’s continues to face legal and financial pressures, with lenders pursuing liquidation proceedings and minority shareholders accusing the board of oppression and mismanagement.
This latest auditor exit adds to Byju’s growing troubles, including missed financial deadlines, plummeting valuations, and strained relationships with investors. Prominent backers like Prosus and Peak XV have voiced concerns about the company’s governance and have pursued legal measures to remove founder Byju Raveendran from leadership.
To complicate matters further, the Indian Supreme Court recently suspended a tribunal ruling that had temporarily halted insolvency proceedings against the firm. Meanwhile, U.S. creditors are trying to recover $1 billion from Byju’s, further escalating tensions around the future of what was once seen as a trailblazer in the global edtech industry.
