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MCA denies giving clean chit to Byju’s over financial fraud, probe still underway
- The MCA issued a statement on Wednesday clarifying that the reports of Byju's getting a clean chit are ‘’factually incorrect'' and ‘’misleading''.
The Ministry of Corporate Affairs (MCA) on Wednesday, June 26, denied recent reports that edtech firm Byju's has been cleared of financial fraud. The MCA issued a statement clarifying that the reports of Byju's getting a clean chit are ‘’factually incorrect'' and ‘’misleading''. The ministry added that the ongoing investigation into allegations of financial misconduct involving Byju's is still underway.
‘’There have been recent reports claiming that Byju's has been cleared of financial fraud in an ongoing investigation by the MCA. It is categorically clarified that such reports are factually incorrect and misleading,'' said the MCA in its statement.
‘’The proceedings initiated by MCA under the Companies Act, 2013, are still ongoing and no final conclusion should be drawn in this matter at this stage,'' it added. On June 26, Bloomberg reported that the year-long probe carried out by the MCA had revealed no evidence of fund siphoning or financial manipulation.
Byju's financial troubles
Earlier this month, it was reported that Byju’s lenders filed petitions in the US to initiate involuntary Chapter 11 bankruptcy proceedings against three US-based guarantors for a $1.2-billion term loan. Last year, the ministry ordered the inspection of Byju's books in the wake of developments at the firm, including its inability to finalise the statements and the resignation of an auditor.
In July 2023, the MCA asked the office of the Regional Director in Hyderabad to conduct the inspection. Mint reported in September 2023 that Byju's had placed two of its businesses—Epic and higher-education platform Great Learning—up for sale to pay its term loan B lenders. Byju’s had acquired these companies during the funding rush of 2021 to build its empire that came to be valued at $22 billion.
The company’s valuation has since significantly eroded, with Byju’s itself diluting its estimated worth for its controversial $200-million rights issue. Once India's highest-valued startup, Byju's has been struggling to repay creditors and pay employees since students returned to in-person learning after the pandemic waned.
The edtech's debt has increased to more than $200 million in India and $200-250 million in the US, including the $40 million it's supposed to pay bondholders every quarter. Think & Learn Pvt Ltd, which is registered in Bengaluru, operates under the brand Byju's.
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Business NewsCompaniesNewsMCA denies giving clean chit to Byju’s over financial fraud, probe still underway
First Published:26 Jun 2024, 08:27 PM IST
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