As Byju’s resumes negotiations to restructure its $1.2 billion term loan, the government’s decision to inspect its operations adds a new challenge for the company.
According to sources familiar with the matter, the Indian government has directed an examination of the financial records of education-technology giant Byju’s. This move comes in the wake of the resignation of the company’s auditor and three board members last month.
Unnamed sources have revealed that the Ministry of Corporate Affairs has requested a report within six weeks regarding the inspection of Byju’s. The decision to conduct the inspection was made after an internal evaluation of the company’s situation. Depending on the findings of the inspection, the government will determine whether the matter should be referred to the Serious Fraud Investigation Office.
As Byju’s, previously valued at $22 billion in its last funding round, resumes negotiations to restructure its $1.2 billion term loan following a breach of certain debt agreement terms, the inspection of its accounts adds yet another challenge. Once a symbol of India’s thriving startup ecosystem, the company has undergone significant downsizing, cutting thousands of jobs, and is now aiming to raise over a billion dollars to overcome its financial difficulties.
A spokesperson for Byju’s did not provide any response to inquiries made via email and text messages. Similarly, an email sent to the Ministry for Corporate Affairs has not yet received a response.
Byju’s auditor, Deloitte Haskins & Sells, resigned in the previous month, citing a delay in the submission of financial statements. Additionally, representatives from three influential backers—Peak XV, Prosus NV, and the Chan-Zuckerberg Initiative—stepped down from Byju’s board during the same week, highlighting a swift decline in trust within the company’s internal structure.
