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Edtech major Byju's in talks with investors who quit board to reconsider

Byju's investors had in recent months raised concerns with the company's leadership related to audit delays and how it dealt with issues relating to its lenders, one source said

Byju’s

Byju's (Photo: Bloomberg)

Reuters

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Byju's is asking three global investors to reconsider their decision to quit its board, three sources with direct knowledge of the situation said, as the Indian education technology firm wrestles with the fallout of its auditor's resignation.
 
Board members representing Peak XV Partners, earlier known as Sequoia Capital India, Prosus and Chan Zuckerberg Initiative stepped down recently without giving a reason, in a setback for Byju's, which was valued last year at $22 billion.
 
News of their departures came on June 22, the same day Deloitte disclosed it was resigning because Byju's had delayed financial statements for 2021-22 and not provided documents, even after the auditor wrote several letters to the board.
 
Byju's leadership is in talks with the investors to try to convince them to reverse their decision, the three sources, who declined to be named as the talks are private, told Reuters.
 
Byju's and the three investors did not immediately respond to requests for comment on Friday.
 
The company, often described as one of India's most successful startups, has called reports of the board exits "speculation", saying it would make disclosures when required.
 
The popularity of Byju's, which offers online tutorials on subjects such as math, physics and chemistry for school students, boomed during the COVID-19 pandemic.
 
Its rise was seen as a boost for India's startup scene as investors including General Atlantic made big bets on Byju's.
 
Two of the sources said the investors took the decision collectively to resign from the board as they were not getting answers from Byju's founder and senior management.
 
Byju's and its lenders are involved in legal cases in the U.S. over the restructuring of a $1.2 billion loan.
 
Byju's investors had in recent months raised concerns with the company's leadership related to audit delays and how it dealt with issues relating to its lenders, one source said.
 
The departures mean Byju's board is now only made up of its founder and chief executive Byju Raveendran, his wife Divya Gokulnath, and his brother Riju Raveendran.
 
While the investors are holding talks with Byju's, it has not yet been decided whether or not their decision to resign would change, one of the sources added.
 
(Reporting by Aditya Kalra; Editing by Alexander Smith)

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First Published: Jun 23 2023 | 4:29 PM IST

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