Sep 07, 2024 01:40 PM IST
BDO, the auditor of Byju’s resigned, citing lack of response to a notice from the board despite the board having been already suspended
Byju’s founders Byju Raveendran and Divya Gokulnath slammed the September 6, 2024 resignation of BDO, the troubled edtech major’s auditor, calling it an “escapist” move, even questioning the legality of such an action, Moneycontrol reported.
Also Read: Indian tax authorities seek $101 million in Byju’s insolvency process
BDO (MSKA & Associates), who was appointed as auditor for Byju’s after Deloitte resigned in 2023 (citing financial irregularities), had sent the company a notice on June 17, a day after the company entered insolvency, and asked for clarifications regarding certain Middle Eastern transactions.
BDO also warned that not responding to the notice within 45 days could lead to its resignation as auditor.
“At that point, the board stood suspended and was therefore neither in a position to accept the resignation by the auditors nor act upon the same,” Moneycontrol quoted the founders as stating.
The company’s board got suspended and an Insolvency Resolution Professional (IRP) was appointed after the legal battle with the Board of Control for Cricket in India (BCCI) resulted in its insolvency.
“Blaming the suspended board for not taking action on a notice sent after the insolvency process has started is baseless, escapist, and legally untenable,” the founders said, according to the report.
“Due to the ongoing litigation with the lenders, we are given to understand by the management that the Company has lost control over certain of its subsidiaries and the management would not have access to the books of account of these subsidiaries. This would further hamper the ability of the Company to be able to complete the preparation of its consolidated financial statements,” BDO wrote in its letter, according to the report.
Byju’s on the other hand, also raised questions regarding BDO’s decision to bypass the IRP, since the IRP was in control of the company and attempts by the IRP to contact BDO didn’t receive any response.
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