(Bloomberg) — India has started an investigation into financing and accounting practices at Byju’s, according to people with knowledge of the matter, after a previous inspection found corporate governance lapses at the struggling online tutoring firm.
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The federal government has asked the regional office of the Registrar of Companies in Hyderabad to investigate Byju’s books to ascertain if the company misreported financial statements and whether funds were siphoned off, the people said, asking not to be identified as the matter is private.
There were shortcomings in the accounts of Byju’s, the people said, explaining the reason for the new probe. They didn’t specify what those failings were. The registrar’s office has one year to submit its report.
Byju’s, once India’s most valued startup, is fighting for its life in courts in India and the US. India’s top court last month struck down a bankruptcy tribunal’s order that allowed Byju’s to settle debts with a key creditor, pushing the online tutor back firmly into the insolvency process. The Bangalore-based company is now pleading its case in a lower court. The control of the firm currently rests with an insolvency resolution professional.
Emails to the spokesperson for India’s Ministry of Corporate Affairs and the insolvency resolution professional went unanswered.
A previous yearlong inspection by the Ministry of Corporate Affairs found corporate governance lapses at Byju’s but no evidence of wrongdoing, Bloomberg News reported in June.
Its founder Byju Raveendran has said that his startup, once worth $22 billion, is now valued at zero. Some of Byju’s large backers such as Prosus NV have written off their investments in the firm.
–With assistance from Sankalp Phartiyal.
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