Byju’s early investor Pai calls for better governance after auditor exit

Written by Chris Thomas

BENGALURU (Reuters) – Mohandas Pai, an early investor in Indian education technology giant Byju’s, said on Friday that the company had not paid enough attention to governance, a day after its auditor and three prominent board members resigned.

Byju’s and its CEO, Byju Raveendran, did not immediately respond to requests for comment.

Deloitte revealed Thursday that it has resigned as auditor because Byju’s had delayed filing financial statements for the 2021-2022 period. On the same day, the board members representing Peak XV Partners, formerly Sequoia Capital India, Prosus and Chan Zuckerberg Initiative resigned without giving reasons.

One of the first investors in Byju was Byju, chairman and co-founder of Aarin Capital and one of India’s most prominent entrepreneurs who once worked for IT giant Infosys. Byju’s website says Pai was among those who “supported and guided us” and “always believed in our vision”.

“Bigo did not pay enough attention to governance and release financial figures in a timely manner. If you take money from any investor, you are responsible,” Pai told Reuters.

Byju offers online lessons for school students. It was once a darling of investors who valued it at $22 billion last year, but it has been embroiled in legal wrangling with lenders and fired several employees amid a broader downturn. The resignation this week of Deloitte and its three board members has cast a spotlight on its financial management.

“Even if you are a private company, you are still accountable,” Pai added.

Global investors in Byju include General Atlantic, BlackRock and Qatar’s sovereign wealth fund, but none have yet commented on recent developments.

The demand for Byju classes has boomed during the COVID-19 pandemic.

(Reporting by Chris Thomas in Bengaluru; Editing by Aditya Kalra and Susan Fenton)