BENGALURU: Edtech firm Byju's auditor BDO has resigned as the company entered insolvency proceedings due to a legal dispute with the BCCI, and this led to the appointment of an Insolvency Resolution Professional (IRP).
However, Byju's in a statement on Saturday said it has complied with every request made by BDO, except those that would require crossing ethical and legal boundaries.
"The real reason for BDO’s resignation is the refusal of Byju's firm to backdate its reports, while BDO went to the extent of recommending a firm that could facilitate such an illegal activity. Multiple call recordings exist, where BDO representatives explicitly suggest backdating these documents, which Byju's refused to do," the firm claimed.
Due to the appointment of the IRP, the company's board was suspended. The company entered insolvency proceedings on July 16.
In a detailed statement, the firm alleged that just one day later, on July 17, BDO sent an email to the suspended board of Byju’s seeking certain clarification regarding historical transactions that the firm had undertaken with a partner based in the Middle East.
"In the same email of July 17, BDO threatened to resign if they did not receive the requested clarifications within 45 days. Notably, BDO failed to mark the IRP in this email, despite being aware that as of that date, the IRP was in control of Byju's and the board had been suspended. BDO eventually resigned after the 45-day window expired, citing the suspended board’s failure to provide the requested clarifications. However, surprisingly, the BDO failed to appreciate that for most of that 45-day period, the IRP was in control of Byju's and only the IRP could provide the answers they were seeking," It said.
Regarding the transactions with its Middle East partner in respect of which BDO had sought clarifications in its email of July 17, the ed tech firm explained that the suspended Board and management of Byju’s had taken the proactive step of arranging a forensic audit, fully transparent and supervised by BDO, to ensure that there were no issues well before their email on July 17.
However, the forensic could not be completed due to the initiation of the insolvency proceedings on July 16, 2024. The failure to complete the forensic therefore cannot be attributed to the suspended Board, it added.