Byju’s denies financial irregularities, says ‘not privy to any report by MCA’

Embattled edtech major Byju’s has said that there are no financial irregularities in the affairs of the company. The company said that it’s not ‘privy to any report by the MCA or the contents thereof’.

This comes at a time when there are news reports that the investigation arm of the Ministry of Corporate Affairs (MCA), the Regional Director, has reportedly submitted a detailed report on the alleged financial irregularities.

• Also read: Karnataka HC extends interim stay on resolution passed at Byju’s EGM 

The Regional Director has alleged over a dozen Companies Act violations and financial irregularities, according to a news report. Following the analysis, the ministry will decide whether or not to refer the matter for further investigation.

“We are not privy to any report by the MCA or the contents thereof. However, we can confirm that there are no financial irregularities whatsoever in the affairs of the company. As far as the Companies Act is concerned, any observations are likely to be technical non-compliances, which have already been duly disclosed in our audited financial statements. We await any formal communication from the MCA,” said Byju’s spokesperson.

• Also read: Aakash and Byju’s merger application withdrawn

Byju’s saga

Recently, the Karnataka High Court extended the interim order, asking Byju’s shareholders not to bring into effect any resolutions passed by investors at the extraordinary general meeting (EGM) held on February 23, reported businessline.

The court’s decision comes in response to an EGM called by a group of shareholders who voted to remove Byju Raveendran from his position.

During the hearing, Byju’s alleged that the investors had committed perjury, as there are discrepancies with respect to the date on which the affidavit attached to the statement of objections were filed.

NCLT cases

Separately, four investors — Prosus, GA, Sofina, and Peak XV — also moved to the National Company Law Tribunal (NCLT) Bengaluru, challenging the $200 million rights issue and filing a petition against oppression and mismanagement by the company.

The NCLT has asked the edtech major to keep the proceeds from the rights issue in an escrow account while the matter is being heard.

In a separate hearing, the NCLT Bengaluru bench has scheduled the next hearing in the insolvency plea filed by BCCI against Byju’s on March 20.

Byju’s argued that BCCI has not rendered any service post the culmination of the contract between the two parties. Thus, the BCCI’s claims of pending dues of ₹158 crore from Byju’s cannot be considered an operational credit. The company argued that invoices for the earlier contract have been paid, and the present claim is for the period post-expiry of the agreement.

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