MP Karti Chidambaram writes to SFIO, seeks probe on Byju's

Karti Chidambaram

Member of Parliament (MP) Karti Chidambaram said on July 21 that he has written to the Serious Fraud Investigation Office (SFIO), a statutory corporate fraud investigating agency, requesting a probe on edtech unicorn Byju's, concerning its finances.

“I have written to the SFIO to look into the financing of Byju’s, it’s imperative that a thorough investigation is launched,” tweeted Chidambaram, on Thursday afternoon, attaching his letter to the investigating agency.

https://twitter.com/KartiPC/status/1550021424164663297

Chidambaram, a member of the Indian National Congress, has long been a vociferous critic of the edtech industry and Byju’s in particular. His letter to the SFIO comes at a time when the world's most valuable edtech startup is muddled with issues including alleged mis-selling of various courses, delayed fundraises, and is thus cutting costs.

In his letter, MP Chidambaram referred to recent news reports by media companies and said that they highlight grave allegations against the company’s finances. 

“A report pointed out that Byju's filings with the Union Ministry of Corporate Affairs indicate that 16,031 Series F preference shares were allotted to Vitruvian Partners on March 29, 2022 for Rs 571 crore. There has been no such filing in the case of Sumeru Ventures or BlackRock since the company's (funding) announcement on March 17. This raises a question of the missing Rs 2,500 crore in the company's funding,” he said.

He also questioned the credibility of its other investor, Oxshott Capital Partners, saying that the latter has yet not paid the invested amount to Byju's. He said, "Nine months on and Byju's has confirmed that it has not yet received this funding from the investor. Oxshott Capital Partners has till date only made one investment - in Byju's."

He added, “As per a news report from July 2, 2022, Byju's has not yet gotten its financial statements for FY 2020-21 audited from its auditor Deloitte, and will take more time to file the Cost Audit Report to the Ministry. This is in clear violation of Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014.”

Also Read: Byju’s’ FY21 results may take few more few weeks, Deloitte yet to sign off on them

Referring to the above, Chidambaram said, "It is pertinent to review the company's finances, at a time when Byju's proposes to expand its business and acquire Nasdaq-listed company 20 at valuation of USD 2.4 billion, while parallelly firing employees to cut costs."

Also Read: Exclusive: Deep cuts at Byju's: Over 2,500 employees laid off across Byju’s, Whitehat Junior and Toppr

Byju’s refrained from commenting on the development, saying that they have already sent responses to the news reports mentioned in the letter.