Byju’s main investors confirmed the board’s exit

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Prosus, Peak XV Partners and Chan Zuckerberg Initiative confirmed on Friday that their representatives have resigned from the board of directors of Byju’s, India’s most valuable startup which is also reeling from the departure this week of auditor Deloitte.

The board members’ resignations — which Byju vehemently denied on Thursday — came shortly after global auditing giant Deloitte told the startup’s board that it was stepping down from its role. Deloitte, which was set to work with Byju through 2025, said the education tech giant had failed to deliver financial results for the year ending March 2022.

A spokesperson for Peak XV Partners confirmed the departure of GV Ravishankar, a partner in the firm, from the Byju board and said the investment giant, formerly known as Sequoia India, is “committed to supporting the firm to bring in an independent director in order to strengthen business processes and internal control mechanisms.”

A Prosus spokesperson said in a statement:

Prosus confirms that Russell Dreisenstock, Board Representative from MIH Edtech Investments, BV (the Prosus entity) on the Board of Directors of Think & Learn Private Limited, has resigned from his position. The company has to submit the letter of resignation to MCA in India within the required time period.

In a statement, the Chan Zuckerberg Initiative confirmed that Vivian Wu has resigned from Peugeot’s board of directors. The resignations halve the size of the board of directors to just three: Byju’s founders – Byju Raveendran and Divya Gokulnath – and Raveendran’s brother Riju.

In a statement, a Byju spokesperson said the company’s management is reaching out to investors to reconfigure the board of directors, and said the departing members left due to a decrease in their stakes.

The need for restructuring arose as a few investors had to vacate their board seats due to their holdings falling below the minimum required as per SHA. We want to reassure all stakeholders that we are actively working towards forming a diverse and world-class Board of Directors commensurate with the size and scale of the company.”

Problems mount in Byju’s, which is also some of the world’s most valuable educational technology. India’s Ministry of Corporate Affairs ordered an investigation into Byju last week after the ministry became aware of “various loopholes in corporate governance” at the start-up, CNBC-TV18 TV reported earlier Friday — another report Byju denied.

Deloitte said Thursday it is resigning because it has not received “any communication” from Byju about the status of its “readiness to audit the underlying financial statements and books and records for the year ended March 31, 2022.”

It was a moment of deja vu for the auditor. Byju attracted intense scrutiny last year from the government, investors and creditors after it repeatedly failed to make its accounts public. In September, Byju’s finally published its accounts for the year ending March 2021, revealing revenue numbers that fell short of its own expectations.