Member of Parliament Karti P Chidambaram, on Thursday said he has written to the India's fraud regulator to launch a thorough investigation into the finances of edtech decacorn Byju's.
"I have written to the Serious Fraud Investigation Office (SFIO) to look into the financing of Byju's. It’s imperative that a thorough investigation is launched," he tweeted.
I have written to the #SFIO to look into the financing of @BYJUS it’s imperative that a thorough investigation is launched. @MCA21India @sequoia pic.twitter.com/DfBUNhNxNU
In a letter attached to the tweet, Chidambaram, a Lok Sabha MP from Sivaganga, pointed at a number of news reports to highlight "grave allegations" against the edtech company concerning its finances.
The SFIO's urgent attention should be brought to three key issues, he noted.
The first issue was related to the $800 million funding round raised by the decacorn in March this year from founder and chief executive Byju Raveendran, with participation from Sumeru Ventures, Vitruvian Partners and BlackRock. Chidambaram referred to a news report saying that Series F preference shares worth Rs 571 crore were allotted to Vitruvian Partners. However, there has been no such filing in the case of Sumeru Ventures or BlackRock since the funding announcement in March. "This raises a question of the missing Rs 2,500 crore in the company's funding," he stated.
The second issue he pointed out was related to the funding of Rs 1,200 crore from Oxshott Capital Partners in October last year. "Nine months on and Byju's has confirmed that it has not yet received this funding from the investor," he said.
The third issue was related to Byju's non-filing of its cost audit report for fiscal 2020-21. "As per a news report from July 2, 2022, Byju's has not yet had its financial statements for FY20-21 audited from its auditor Deloitte and will take more time to file the cost audit report to the Ministry. This is in clear violations of Rules 6 (5) of the Companies (Cost Records and Audit) Rules, 2014," he said.
Byju's and Chidambaram did not respond to request for additional comments.
Byju's has been under fire these past months over its delay in filing audited financials as well as over its $800 million funding round. Besides, the company's subsidiaries have had to lay off staff in the past weeks amid a funding crunch.
Earlier this month, a spokesperson clarifying on the March funding round told VCCircle that Byju's is yet to receive $250 million from Sumeru Ventures and Oxshott Capital Partners.
Part of this sum was rolled over from an investment announcement made in September 2021 (as part of the company’s $340 million June 2021 round featuring investors such as UBS Group, Abu Dhabi’s sovereign wealth fund ADQ) that Oxshott would be joining the company’s cap table. That unrealized investment was part of the $800 million funding round announced by the company in March this year, the spokesperson clarified. Oxshott is yet to pay and so is Sumeru Ventures, which was part of the March 2022 round.
Meanwhile, Byju's had proposed to acquire American edtech company 2U for $2.4 billion in the largest acquisition in this space which was also highlighted by Chidambaram.
