Mumbai (Reuters) – Audit firm Deloitte and three board members have exited Indian startup Byju’s, sources said on Thursday, amid a legal battle and following an investor slashing the valuation of the edtech firm.
Deloitte, which was slated to audit Byju’s until 2025, has stepped down with “immediate effect” mid term, due to “long delayed” financial statements by the company, according to the auditing firm’s resignation letter to the company, seen by Reuters.
Byju’s said in a statement it has appointed BDO as its new auditor, adding that this will help it “uphold the highest standards of financial scrutiny and accountability.”
Deloitte, one of the world’s largest auditing firms, said there was a “significant impact” on its ability to perform the audit according to necessary standards and that it has “not received any communication on the resolution of the audit report modifications” for 2020-21.
Meanwhile, three board members of Byju’s – Peak XV Partners’s (earlier Sequoia Capital India) GV Ravishankar, Prosus’ Russell Dreisenstock and Chan Zuckerberg Initiative’s Vivian Wu have resigned from the board, three sources familiar with the matter said.
A Byju’s spokesperson called the news of the resignations “entirely speculative”. The company firmly denies these claims, the spokesperson said, adding significant developments or changes within the organization are shared through official channels.
Ravishankar and Wu did not immediately respond to calls and messages and Dreisenstock was not reachable.
The departures mean Byju’s board now only comprises of the founder’s family – Chief Executive Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran, the sources said.
Byju’s was valued at $22 billion last year, but saw its valuation slashed to $8.4 billion earlier this year by Blackrock, a minor shareholder in the company.
Byju’s is also locked in a dispute with lenders, who allege the company hid $500 million, leading it to sue lender Redwood Management.
The edtech firm skipped a $40 million repayment due earlier this month.
