Byju’s Slams BDO’s Resignation As ‘Escapist And Legally Indefensible'

BDO (MSKA & Associates) was appointed as the auditor for Byju’s and Aakash Educational Services in June 2023, following Deloitte's resignation due to concerns over irregularities

In a sharp statement, Byju raised concerns about the legality of BDO’s resignation

Source : Byju's

Byju’s founders, Byju Raveendran and Divya Gokulnath, have responded strongly to the recent resignation of BDO as the company's auditor. They have criticised BDO for what they describe as procedural shortcomings and characterised the firm's departure as an "escapist" manoeuvre.

In a sharp statement, Byju raised concerns about the legality of BDO’s resignation. They argued that the timing of the resignation, which occurred amid the company's insolvency and while its board was suspended, casts doubt on the legitimacy of the move.

In an official statement, the founders of Byju’s, along with the former board members—comprising only themselves and Riju Raveendran highlighted that BDO's initial notice seeking clarifications regarding certain Middle Eastern transactions was dated July 17, which was the day after the company entered insolvency. “At that point, the board stood suspended and was therefore neither in a position to accept the resignation by the auditors nor act upon the same; equally, the suspended board cannot appoint a new auditor until the insolvency process is in place,” they said.

They criticised BDO’s assertion as “baseless, escapist, and legally indefensible,” referring to the firm’s criticism that the suspended board did not provide adequate responses within 45 days, which they claimed led to BDO’s resignation.

BDO (MSKA & Associates) was appointed as the auditor for Byju’s and Aakash Educational Services in June 2023, following Deloitte's resignation due to concerns over irregularities. The appointment was made for a five-year term.

In July 2024, Byju’s officially initiated insolvency proceedings after a protracted legal dispute with the Board of Control for Cricket in India (BCCI). Consequently, the company's board, which included its founders, was suspended, and an Insolvency Resolution Professional (IRP) was appointed to manage the insolvency process.

The following day, Byju's reported that BDO sent an email to the suspended board requesting clarifications about historical transactions, especially concerning Byju's operations in the Middle East. BDO also warned that a failure to respond within 45 days could result in their resignation.

On September 6, BDO resigned, citing the board’s inability to provide the requested clarifications.