Prosus NV, an investor in Indian educational technology startup Byju's, said on Tuesday the company's management "regularly disregarded advice" despite repeated efforts by the Dutch-listed tech firm's former director to improve governance.
"Executive leadership at BYJU’S regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters," Prosus said in a statement.
Prosus - which slashed its valuation of Byju's to $5.1 billion from $22 billion last year - said the decision for its director, Russell Dreisenstock, to step down from Byju's board last month was mainly because he was "unable to fulfil his fiduciary duty to serve the long-term interests of the company and its stakeholders."
"We have updated our shareholders about definitive steps taken to improve corporate governance and financial reporting, Byju's said in response to a Reuters request for comment on Prosus's statement, one of the most scathing attacks on the startup by its top investor shareholder, with a 9.6% stake.
Mohandas Pai, one of India's most prominent business figures who was an early investor in Byju's, had also called for better governance in the firm before joining Byju's advisory council earlier this month to address corporate governance issues.
Deloitte, which was slated to audit Byju's until 2025, also quit due to "long-delayed" financial statements by the company, citing "significant impact" on its ability to perform the audit according to necessary standards.
Reuters has reported that Byju's will file 2022 audited earnings by September and 2023 results by December.
The Indian startup has let go of thousands of employees this year while grappling with multiple legal and financial woes.
Byju's, once India's most valuable startup, counts investors such as General Atlantic and BlackRock among its backers, but has seen its auditor Deloitte and multiple investor board members resign in recent weeks.
Prosus' statement also added that "over time, its (Byju's) reporting and governance structures did not evolve sufficiently for a company of that scale."
