June 26th 2024.
After a thorough investigation by the government, it has been found that Byju's, the edtech firm, did not engage in any fraudulent activities such as siphoning off funds or manipulating accounts. However, the company did face some lapses in its corporate governance structure, as stated by the government.
According to sources, the Ministry of Corporate Affairs conducted the probe after receiving complaints from the National Commission for Protection of Child Rights and the Registrar of Companies. These complaints alleged that Byju's was pressuring customers to continue using their products or services and was not issuing refunds to those who requested it.
Although the report has not been made public yet, it is said that the investigation found that the promoters and directors of Byju's could have been more transparent with their actions. The report also noted that some of the corporate governance issues raised by the directors were related to transparency and independence.
Furthermore, the report mentioned that the Nominee Directors had resigned in 2023-24 due to corporate governance issues, including the lack of involvement in important financial and business policies. However, it was also observed that Byju's has been actively working to resolve complaints and grievances, resulting in the resolution of many complaints while the rest are still being addressed.
As of January 31, Byju's had a paid customer base of 7.5 million students. Out of the 4,390 complaints filed, 2,856 have been resolved, and the remaining complaints make up only 0.02% of the total paid customer base. The report also stated that there were no issues with the company's change in accounting policy for revenue recognition.
It was revealed that Byju's had used Rs 9,025 crore for mergers and acquisitions between 2014 and 2022, which resulted in an income of Rs 4,287 crore. However, the edtech company is currently facing multiple court cases, including one in the National Company Law Tribunal. The NCLT has restrained Byju's from utilizing any funds, making it difficult for the company to raise $200 million through a rights issue.
In addition, Byju's is also exploring out-of-court settlements with some of its creditors. Unfortunately, the company, once valued at $22 billion, is now worth zero. This was evident when global investment giant Prosus recorded a loss of $493 million in its annual report for FY24 due to writing off the value of its shareholding in Byju's.
In conclusion, the government's investigation has found that Byju's did not engage in any fraudulent activities. However, the company did face some issues in its corporate governance, which it is actively working to resolve. Despite facing challenges and legal battles, Byju's remains determined to overcome them and continue providing quality education to its customers.
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