The government has initiated a fresh investigation into the financial and accounting practices of Byju's, the beleaguered edtech giant, following earlier findings of corporate governance lapses, according to Bloomberg. Sources familiar with the matter confirmed the news agency about the probe.
The Ministry of Corporate Affairs has tasked the regional Registrar of Companies (RoC) in Hyderabad with scrutinising Byju's financial records. The objective is to determine whether the company misreported its financial statements or engaged in fund mismanagement. The RoC has a year to complete its investigation and submit a detailed report.
According to sources, discrepancies were detected in Byju's accounts, prompting the current inquiry. However, specifics of these shortcomings remain undisclosed.
Byju's, once celebrated as India’s most valuable start-up with a valuation of $22 billion, now faces existential challenges. The company is embroiled in legal battles in India and the United States. Last month, the Supreme Court overturned a bankruptcy tribunal's ruling that had permitted Byju's to negotiate debt settlements with a major creditor. This decision has pushed the firm back into insolvency proceedings. Currently, an insolvency resolution professional oversees the company's operations.
Requests for comment from the Ministry of Corporate Affairs and the insolvency resolution professional have gone unanswered.
Earlier this year, a yearlong inspection by the Ministry found corporate governance lapses at Byju's, though no concrete evidence of misconduct was uncovered, as reported by Bloomberg News in June.
Founder Byju Raveendran, who once spearheaded the start-up’s meteoric rise, recently stated that the company’s valuation has plummeted to zero. Major investors, including Prosus NV, have written off their stakes in the firm, reflecting the ongoing financial and operational turmoil. This investigation adds to the mounting challenges faced by Byju's, signaling further scrutiny for a company that was once seen as a trailblazer in India's start-up ecosystem.