The Centre has launched a probe against BYJU’S over allegations that the Byju Raveendran-led company “misreported” financial statements and siphoned off funds
While a previous investigation by the ministry of corporate affairs flagged compliance lapses at BYJU’S, it had cleared the edtech startup of any financial fraud
This follows reports of a lawsuit filed in a Delaware court last month that accused BYJU’S of siphoning off funds worth $700,000 from its US subsidiaries
Months after an investigation by the ministry of corporate affairs found corporate governance lapses at BYJU’S, the Centre has ordered another probe into its financial and accounting practices.
The Registrar of Companies in Hyderabad has been ordered to investigate BYJU’S
books over allegations that the Byju Raveendran-led company “misreported” financial statements and siphoned off funds, Bloomberg reported, citing sources.
The report, citing sources, said that there were discrepancies in BYJU’S accounts.
It is pertinent to note that while the previous investigation by the Centre flagged compliance issues at BYJU’S, it cleared the company of any financial fraud or any accounting malpractice, citing a lack of evidence.
This follows reports of a lawsuit filed in a Delaware court last month that accused BYJU’S of siphoning off funds worth $700,000 from its US subsidiaries in violation of bankruptcy proceedings.
As per the lawsuit, the edtech startup allegedly diverted the said funds to Whitehat Education Technology. The money was to be repaid to its US lenders who have been at loggerheads with BYJU’S over pending dues.
The Centre’s investigation into BYJU’S comes at a time when the startup is undergoing insolvency proceedings and founder Raveendran is facing accusations that he tried to regain control of Epic!, a US-based subsidiary of BYJU’S, using loan money that he allegedly hid from investors.
Reports also surfaced last week that Raveendran allegedly hired a US-based businessman to do his bidding and tried to convince him to flee the country to avoid testifying against him in a federal court.
Adding to its woes, the National Company Law Tribunal earlier this month blocked Aakash, an Indian subsidiary of BYJU’S, from amending its articles of association (AoA), a move that also prevented Raveedran’s alleged attempt to dilute his shareholding in the firm.
It is pertinent to note that the Supreme Court last month set aside a ruling by the National Company Law Appellate Tribunal that approved a settlement between BYJU’S and the Board of Control for Cricket in India (BCCI) over INR 158 Cr of dues owed to the cricket board. The Supreme Court order effectively resumed bankruptcy proceedings against BYJU’S.
