Member of Parliament (MP) Karti Chidambaram has written to fraud regulator Serious Fraud Investigation Office (SFIO), requesting a thorough investigation into the finances of India’s most valuable startup Byju’s. The MP has cited reports that suggested the firm has yet to secure USD 250 million investment from its USD 800 million funding round announced in March.
The letter comes after reports have said that Byju’s is yet to receive funds from Sumeru Ventures and Oxshott that have committed to investing about USD 250 million in the edtech firm.
The company in a statement to CNBC-TV18 on July 11 said, “We would like to clarify that, we have received the funds from 11 out of 13 investors in the round which started in June. Additionally, Oxshott wasn't leading the round, in-fact they were one of the last investors to come in for that round. Out of the total Rs 3600 crore; Rs 2400 crore has already come in.”
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Alleging loopholes in BYJU’S finances, Chidambaram called for a probe into the edtech giant for not submitting its statements for the financial year FY22.
Chidambaram in his letter highlighted that Byju’s is yet to get its 2020-21 (FY21) financial results signed from its auditor Deloitte and could take another few weeks for the company to file them with the ministry of corporate affairs (MCA).
In the letter he said, “This is a clear violation of Rule 6(5) of the companies (Cost Records and Audits) Rules, 2014.”
Stressing over the importance of an investigation, Chidambaram further added, “At a time when BYJU’s proposes to expand its business and acquire Nasdaq-listed company 2U at a valuation of USD 2.4 billion, while partially firing employees to cut costs, it becomes pertinent to review the company’s finances.”
BYJU's is pushing hard with its US expansion with an offer of USD 1 billion for the NASDAQ-listed edtech company 2U, according to a Bloomberg report. Earlier, there were reports that BYJU's was eyeing the NYSE-listed Chegg.
The edtech firm’s aggressive global expansion plans comes at a time when it is resorting to mass layoffs in a bid to cut costs. BYJU’s backed White Hat Jr and Toppr last week laid off 600 employees. Byju’s-owned Great Learning was also under fire for 'mis-selling' IIT-Bombay course.
This is not the first time that the Sivaganga MP has come down heavily on edtech firms. Last year, Karti Chidambaram questioned the quality of education and teachers on online platforms in India’s burgeoning edtech sector, and called for oversight and regulation. In the Lok Sabha on December 14, 2021, he also focused his attention on the predatory marketing practices of edtech platforms as well.
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