Indian education technology firm Byju's announced on Saturday that its auditor, BDO Global, has resigned after the startup failed to provide requested documents following the initiation of insolvency proceedings. Byju's is currently grappling with multiple challenges, including insolvency proceedings and a $1 billion claim from U.S.-based Glas Trust. BDO was appointed as the auditor earlier this year, succeeding Deloitte, which had previously resigned citing issues with the company's financial reporting. In a letter to the company dated Tuesday, the auditor expressed concerns over significant delays in filing financial statements for the year ending March 2023 and inadequate support from management to complete the audit. "We have reasons to believe that the management of the company lacks transparency with respect to providing full information to the auditor for their consideration and evaluation," BDO stated in the letter, which was seen by Reuters. Byju's responded by stating that BDO's request for documents should have been directed to the insolvency professional in charge, as the firm's board had been suspended due to the insolvency proceedings. BDO, in its email to the board, had requested a detailed forensic review of transactions involving a Dubai-based subsidiary. The auditor, in a statement to Reuters, emphasized that it had conducted its auditing procedures in accordance with applicable standards and legal requirements, noting that its resignation letter speaks for itself. Byju's, in its statement, called for a forensic audit of BDO's resignation by the insolvency professional, who was appointed by an Indian court. Backed by General Atlantic, Byju's was valued at $22 billion in 2022 but has since faced a decline in fortunes due to regulatory issues and a recent dispute with U.S. banks demanding $1 billion in unpaid dues, leading to the company's insolvency and an assets freeze.
Text: Lara Palmer
08.09.2024
BDO Global cites lack of transparency and delays in financial reporting as reasons for resignation.