The Financial Reporting Review Board (FRRB) of the ICAI is expected to meet next week to take a view on the matter. Mitra told Business Standard that the edtech company was under the scanner because of a 22-month delay in submitting financial reports.
“Even the [Ministry of Corporate Affairs] had requested them for submission. We will start looking into it formally after November 21, after the world congress of accountants is over,” Mitra said.
An email sent to Byju’s for comments did not elicit any response.
Byju’s booked a loss of Rs 4,588 crore in financial year 2020-21 (FY21), 19 times more than the preceding year, according to its latest financial report, which was released by the firm last month.
The edtech giant, which was last valued at $22 billion, earned Rs 2,428 crore in revenues in FY21. Its adjusted revenue in FY20 was Rs 2,511 crore and the adjusted loss was Rs 300 crore.
Byju’s recently said it would lay off nearly 2,500, or 5 per cent, of its 50,000 employees as part of an “optimisation” plan.
Karti P Chidambaram, Congress leader and Member of Parliament in the Lok Sabha, recently wrote to the ICAI urging it to probe the financial statements, raising concerns over the statements. He said Byju’s had released the FY21 results after a delay of 18 months, nearly missing four deadlines.
The FRRB under the ICAI has the power to review general purpose financial statements of enterprises and auditors’ reports if serious accounting irregularities have been highlighted by the media.
“I would like to bring to your attention a number of red flags in Byju’s financials for FY21. Analysing how Byju’s earns its money and where it spends it is puzzling. Nearly 81 percent of its operating revenue for FY21 constitutes ‘sale of edtech products’,” Chidambaram said in the letter, which he posted on Twitter. “This includes the sale of tablets, SD cards, and laptops. For an edtech company, is it not a blatant misrepresentation of facts to classify the hardware as edutech.”
Byju Raveendran, founder and CEO of Byju’s, recently told employees that the firm had started shifting its focus towards profitable growth. He said revenue of $2 billion was within the firm’s reach and its FY22 revenue was nearly Rs 10,000 crore, or $1.3 billion. “This means we are now a billion-dollar-plus revenue company,” said Raveendran, in a letter addressed to employees.