ICAI disciplinary panel report on Byju’s soon
July 6, 2024
The disciplinary committee at the Institute of Chartered Accountants of India (ICAI) will shortly come out with its report on the beleagured edtech firm Byju's.
ICAI president Ranjeet Kumar Agarwal told FE that the financial reporting review board (FRRB) has referred the case to the disciplinary committee which is currently hearing the matter. “The FRRB was not convinced with the reporting done by the Byju’s chartered accountant. The disciplinary committee is seeking comments from the company and it will soon bring out its report,” he said.
Agarwal said that FRRB has lesser power as compared to a disciplinary committee. “FRRB can seek information to a certain extent. The disciplinary committee is currently hearing the matter. Even though there’s a timeline, because of the case overload, the committee is taking time,” he said.
Early this year, Agarwal said that the ICAI’s inspection had found “gross negligence” in the accounting practices of individual auditors at Byju’s and the case was recommended to FRRB to take punitive actions on the concerned auditors.
On Thursday, the National Company Law Tribunal (NCLT) warned Byju’s to pay the pending salaries of employees or face an audit by ICAI. The court directed to start-up to pay the March and February salaries in full. “You are a company that is functioning. Surely, you should be having revenues,” the Bengaluru bench of NCLT reportedly told Byju’s.
Byju’s has told its employees that the delay are primarily due to the delay in accessing the funds raised through the rights issue which are locked up in a separate account due to the ongoing dispute with investors like Prosus, Peak XV (formerly Sequoia), General Atlantic and Sofina who had asked for a stay on the rights issue.
Meanwhile, the Byju’s is simultaneously facing scrutiny of the regional director at the ministry of corporate affairs (MCA) for possible financial irregularities. In June last year, Deloitte Haskins and Sells resigned as Byju’s auditor citing a significant delay in providing audited financial statements for FY22.
The MCA has recently clarified that the probe against Byju’s is still under progress and “no final conclusion be drawn in this matter at this stage”. Battling with financial issues, Byju’s valuations has dropped 99% from $22 billion in July 2022 to around $200 million currently.
[The Financial Express]
