In Ed-tech giant Byju's, which is in hot water following a $1.2 billion loan payment issue and resignation of all three non-family board members, constructive negotiations are ongoing, and the company is hopeful for a quick resolution, its Global General Counsel Roshan Thomas assured shareholders in a recent meeting, highly placed sources told NDTV. CEO Byju Raveendran, admitting facing challenges in the past year, told shareholders that the company is looking to add more independent Directors.
Byju's new Chief Financial Officer (CFO) Ajay Goel, in the meeting, addressed shareholders for the first time since joining the firm in May 2023, and said closing the audited financials is his primary focus. He committed to closing the audit for FY2022 by the end of September and FY 2023 by the end of December, sources said.
Audit firm Deloitte had earlier resigned as auditors of Byju's citing a delay in submission of financial statements.
Deloitte Haskins & Sells, which was slated to audit Byju's until 2025, stepped down with "immediate effect" midterm, stating that "the financial statements of the company are long delayed."
In a letter sent to the board of Think & Learn Pvt Ltd (known as Byju's), Deloitte said it has not been able to start an audit due to the delays and that will have a "significant impact" on its ability to "plan, design perform and complete" the audit as per standards.
The ed-tech firm then appointed BDO as its new auditor, saying this would help it "uphold the highest standards of financial scrutiny and accountability."
Byju Raveendran also said that the company hasn't accepted the resignations of board members.
Three of Byju's board members, including GV Ravishankar, MD of early-backer Peak XV Partners (formerly Sequoia Capital India), Russell Dreisenstock of Prosus, and Chan Zuckerberg's Vivian Wu had reportedly resigned, though Byju's then called the reports "entirely speculative".
The Byju's board now comprises the founder family - chief executive Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran.
Russell Dreisenstock confirmed in the meeting that resignation of auditors and board members were unrelated.
The three who have resigned said that discussions on board reconstitution had been ongoing for a long time, and they are working closely with the company on this matter.
GV Ravishankar reiterated Mr Dreisenstock's statement and confirmed that his resignation is not connected to the audit or the change in auditor.
They expressed gratitude to Deloitte, while mentioning that the auditor had been causing delays and complications in the results.
The decision to change auditors was mutual, and BDO has been appointed as the new auditor, they said.
Vivian Wu, who initially lacked panellist access, then joined the call and confirmed that their intent to resign had nothing to do with the auditor's resignation.
Byju Raveendran emphasised his commitment to the company, stressing that he has devoted the past 18 years to building it. "Byju's is not my work, it is my life," he said in the meeting, according to sources.
He highlighted his personal investments in the company, including $400 million in the parent company, $250 million for the Aakash acquisition, and an additional $250 million through pledged secondary shares for the last funding round. He also mentioned that all the secondaries done have been invested back in the company at 22 $2 billion valuation.
Despite the challenges faced, he mentioned that most business verticals are performing well. He also acknowledged the company's past mistakes and assured shareholders that his learnings far outweigh any missteps.
The CEO expressed his full confidence in the new CFO's ability to complete the audit within the promised timeframe.
The Board members were asked for final thoughts, and they expressed their close collaboration with the company and wished for its success.
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