The billionaire founder of edtech giant Byju’s, which has seen its auditor and three board members leave within a week, has reached out to investors assuring them to release financials and strengthen accounting processes, according to a Bloomberg report.
The report, quoting people familiar with the discussion, said that Byju Raveendran on a call with investors acknowledged his failure in installing processes that could have helped close the accounts on time and said its systems are being improved with the help of a newly appointed finance chief and general counsel. The startup told investors it is on track to finalise fiscal 2022 numbers by the end of September after hiring MSKA & Associates to replace Deloitte Haskins & Sells.
Byju’s, which has a total valuation of about $22 billion, has been facing troubles since it missed deadlines to file audited financial accounts. Recently, Byju’s skipped paying $40 million in interest payments on the term loan it had raised in November 2021. Following this, the company also filed a case against one of its lenders in the New York Supreme Court and also sought disqualification of the lender and called it “predatory”.
The lawsuit was, however, term “meritless” by the group of lenders, who they say collectively own more than 85 per cent of Byju’s $1.2 billion term loan.
Last week, edtech giant Byju’s also started laying off employees across departments to cut costs amid increased tension with lenders. According to reports, the number of layoffs is likely to be above 1,000 employees, mostly senior staff who have spent over 2 years.
In late-April, the ED also conducted searches on Byju’s as part of a foreign exchange violation probe under the provisions of the Foreign Exchange Management Act (FEMA). A total of three premises, two businesses and one residential, of Byju’s CEO Raveendran Byju and his company were raided.
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