Embattled edtech firm Byju’s has hit back at its former auditor BDO (MSKA & Associates) after the latter resigned citing financial discrepancies and governance concerns.
In a strong response to BDO’s resignation, Byju's has accused the audit firm of making unethical requests and manipulating the audit process, including suggesting the backdating of financial reports.
"Multiple call recordings exist, where BDO representatives explicitly suggest backdating these documents, which BYJU’S refused to do," the Byju’s statement noted.
The company highlighted that its decision to stand firm on ethical grounds was the real reason for BDO’s resignation, not the concerns the auditor raised publicly.
BDO had earlier raised doubts about Byju’s ability to recover Rs 1,400 crore from a Dubai-based reseller, More Ideas General Trading LLC, and noted delays in financial reporting and insufficient management support.
The auditor also highlighted ongoing litigation and liquidation proceedings initiated by creditors as additional red flags.
However, Byju’s pointed out significant gaps in BDO’s handling of the situation.
The edtech company claimed that BDO had requested clarifications on transactions from the company’s suspended board shortly after Byju's entered insolvency proceedings on July 16, 2024.
However, Byju’s claimed that BDO failed to communicate with the appointed Insolvency Resolution Professional (IRP), the entity in charge during this period.
The edtech company further claimed that despite repeated efforts from the IRP to engage with BDO, the auditor did not respond, which led to misunderstandings and eventually their resignation.
"BDO’s lack of communication with the IRP is surprising and suspicious," Byju’s added.
The edtech giant stated that it had proactively initiated a forensic audit of its transactions with its Dubai-based partner before BDO raised the issue, but the audit was paused due to the insolvency proceedings.
Byju’s, which has seen its valuation fall from a peak of $22 billion, is now facing mounting challenges on multiple fronts.
With legal battles and creditor pressures intensifying, the resignation of BDO only deepens the company’s crisis.
Nonetheless, Byju’s reiterated that it remains committed to ethical conduct and transparency, adding that it is prepared to support any audit under the oversight of the Insolvency Resolution Professional.
