• Byju's auditor, BDO Global, has resigned amid the company's ongoing insolvency proceedings.
• This marks the second time an auditor has left Byju's, with Deloitte previously exiting due to financial reporting issues.
• BDO cited concerns over Byju's transparency and delays in filing financials.
• Byju's has called for a forensic audit of BDO's exit and maintains its commitment to ethical conduct and transparency.

In a significant development that has sent shockwaves through the Indian edtech sector, Byju's, a leading education technology company, announced on Saturday that its auditor, BDO Global, had resigned. The resignation came in the wake of the startup's failure to provide requested documents following the initiation of insolvency proceedings.

Byju's, once valued at a staggering $22 billion in 2022, is currently embroiled in several legal and financial battles. These include insolvency proceedings and a $1 billion claim from U.S.-based Glas Trust. The company's fortunes have taken a hit due to regulatory issues and a dispute with U.S. banks over unpaid dues, leading to an assets freeze.

BDO Global's resignation marks the second time an auditor has left Byju's. Earlier this year, Deloitte, the former auditor, had also parted ways with the company, citing issues with the company's financial reporting. BDO was appointed as the new auditor following Deloitte's exit.

BDO's Concerns and Byju's Response

In a letter to Byju's, dated Tuesday, BDO expressed concerns over the company's transparency. Despite inordinate delays in filing its financials for the year ended March 2023, the management had provided inadequate support to complete the audit. We have reasons to believe that the management of the company lacks transparency with respect to providing full information to the auditor for their consideration and evaluation, BDO wrote in the letter.

Byju's, however, defended its inability to provide the requested documents. The company stated that BDO had requested the materials from the firm's board, which had been suspended due to the insolvency proceedings. The letter, Byju's argued, should have been addressed to the insolvency professional in control of the firm at the time.

BDO, in its email to the board, had sought a detailed forensic review of transactions involving a Dubai-based subsidiary. The auditor, however, did not respond to requests for comment about its resignation on Saturday.

Byju's Accusations and Ongoing Challenges

In response to BDO's resignation, Byju's called for a forensic audit of the auditor's exit by the insolvency professional, who was appointed by an Indian court. The company also accused BDO of suggesting that financial reports be backdated, a claim the company refused, leading to the auditor's resignation.

Byju's CEO, Byju Raveendran, alleged that the auditors were the first to know about the insolvency proceedings but did not inform the court-appointed insolvency resolution professional (IRP). They have asked us to do multiple backdating of reports. All that happened recently. We did not agree. We have nothing to hide, he said.

The company's financial woes have been further complicated by ongoing litigation and liquidation proceedings initiated by creditors. Despite these challenges, Byju's reiterated its commitment to ethical conduct and transparency, stating that it is prepared to support any audit under the oversight of the Insolvency Resolution Professional.