BYJU'S: 3 key board members tender resignation over lender fiasco
What's the story
Trouble seems to have a way of targeting BYJU'S, India's most valuable start-up. The company has been involved in a spat with its lenders for a while. Now, the issue has reached its boardroom. According to the Economic Times, key board members of the company representing Peak XV Partners (formerly Sequoia Capital), Chan Zuckerberg Initiative (CZI), and Prosus have tendered their resignations.
Resignation
Board members had differences with Byju Raveendran on key issues
The board members who submitted their resignations include GV Ravishankar (Peak XV), Vivan Wu (CZI), and Russell Dreisenstock (Prosus). They are non-executive directors of the company. Their resignations are yet to be accepted by the ed-tech giant. The board members decided to tender their resignations due to how Byju Raveendran, the company's CEO and co-founder, has been dealing with the lenders.
Differences
There was a lack of agreement between board and founders
The issues between the board and founders over the way in which the company was run have been going on for a while. The board and Raveendran did not see eye to eye in the way he approached the lenders. According to Inc42, the board members have been thinking about exiting the company for the past few weeks.
Lender issue
There are two lawsuits related to the loan
At the root of BYJU'S latest problems is a $1.2 billion loan it raised in 2021. The issues started when some of the lenders asked the company to repay part of the loan. Talks to restructure the loan were scrapped earlier this month. Presently, there are two lawsuits regarding the loan in the US, one by lenders and the other by BYJU'S.
BYJU'S
BYJU'S denied reports about resignations
Meanwhile, BYJU'S rejected the reports about resignations and called them "entirely speculative." "BYJU'S firmly denies these claims and urges media publications to refrain from spreading unverified information or engaging in baseless speculation," a company spokesperson said. "We request media outlets to rely on verified sources and official statements for accurate information regarding BYJU'S," they added.
Auditor
Deloitte stepped down as BYJU'S auditor
The board members may not have resigned just yet, but BYJU'S has announced the end of Deloitte's time as its auditor. The company appointed BDO (MSKA & Associates) as its statutory auditors. Interestingly, Deloitte did not carry out the edtech giant's FY22 audit, which means it will be delayed further. It is unclear what prompted the company to change its auditor.