BDO (MSKA & Associates) recently resigned from their role as the auditor for Byju's and Aakash Educational Services, citing concerns related to financial and governance issues. The decision to resign came after issues like delays in financial reporting, inadequate management support, and doubts about recovering substantial payments from a Dubai-based entity were brought to light.
One of the key points mentioned in the resignation letter from MSKA & Associates was a questionable transaction involving a Dubai-based reseller, More Ideas General Trading LLC. There were reports to the Corporate Affairs ministry about the recovery of around Rs 1,400 crore from this reseller, raising concerns about financial matters within Byju's. Additionally, the letter highlighted ongoing litigations against Byju's and its board, including liquidation proceedings by lenders and allegations of oppression and mismanagement by minority shareholders.
The situation with Byju's is notable given its previous standing as one of India's most valuable startups, valued at $22 billion. However, the company has been facing challenges, including a recent Supreme Court ruling to resume insolvency proceedings. The concerns raised by the resignation of BDO (MSKA & Associates) shed light on the complex financial and governance issues facing Byju's and the challenges it currently navigates.