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Sivaganga Member of Parliament Karti Chidambaram has urged the Serious Fraud Investigation Office (SFIO) to launch an investigation into the finances of Byju’s.
In his letter to SFIO, the Congress MP pointed out media reports that levelled ‘grave allegations’ regarding the edtech company’s finances.
On March 17, 2022, Byju’s announced that it raised $800 million (₹6,401 crore) from Sumeru Ventures Partners and BlackRock. Byju Raveendran, Founder and CEO of the company had made a personal investment of $400 million (₹3,200 crore) in this fundraise.
A report pointed out that Byju’s filings with the Ministry of Corporate Affairs indicate 16,031 Series F preference shares were allotted to Vitruvian Partners on March 29, 2022 for ₹571 crore.
According to Chidambaram, there has been no such filing in the case of Sumeru Ventures or BlackRock since the company’s announcement on March 17. This raises a question of the missing ₹2,500 crore in the company’s funding, he alleged.
One of the investors Sumeru Ventures made three sizable investments—all between February and April 2022—including one in Byju’s, after lying dormant for three years, Chidambaram added.
In October 2021, Oxshott Capital Partners is said to have made an investment of ₹1,200 crore in Byju’s. After nine months, Byju’s has confirmed that it has not yet received this funding from the investor. Oxshott has till date made one investment—in Byju’s, he said.
The MCA in its circular on September 27, 2021 had extended the last date of filing Cost of Audit Report for FY 2020-21 to October 31, 2021.
According to news reports appeared on July 2, 2022, Bjyu’s has not yet gotten its financial statements for FY2020-21 audited from it’s auditor Deloitte, and will take more time to file the Cost Audit Report to the Ministry. This is a clear violation of Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014, he said.
“At a time when Byju’s proposes to expand its business and acquire Nasdaq-listed company 2U at a valuation of $2.4 billion while parallely firing employees to cut costs, it becomes pertinent to review the company’s finances.
“In light of these financial loopholes, I urge the SFIO to launch an investigation into finances of Byju’s,” he said.
Last December, Chidambaram in the Lok Sabha questioned the practices of edtech platforms like Byju’s, and and called for regulation of the edtech sector.
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