The company wishes to outline below some serious concerns about unethical requests made by audit firm, BDO and its failure to adhere to proper procedures.
Unethical Requests and Manipulative Tactics: BYJU’S has complied with every request made by BDO, except those that would require crossing ethical and legal boundaries. The real reason for BDO’s resignation is BYJU'S firm refusal to backdate its reports, while BDO went to the extent of recommending a firm that could facilitate such an illegal activity. Multiple call recordings exist, where BDO representatives explicitly suggest backdating these documents, which BYJU’S refused to do. BYJU’S strongly believes that this is the main reason for their resignation.
Timeline of Events: BYJU’S entered insolvency proceedings on July 16, 2024, due to a legal dispute with the Board of Control for Cricket in India (BCCI). This triggered the appointment of an Insolvency Resolution Professional (IRP), which resulted in the suspension of the company’s Board. Just one day later, on July 17, BDO sent an email to the suspended board of BYJU’S seeking certain clarification regarding historical transactions that BYJU’s had undertaken with a partner based in the Middle East. In the same email of July 17, BDO threatened to resign if they do not receive the requested clarifications within 45 days. Notably, BDO failed to mark the IRP in this email, despite being aware that as of that date, the IRP was in control of BYJU’S and the board had been suspended. BDO eventually resigned after the 45-day window expired, citing the suspended board’s failure to provide the requested clarifications. However, surprisingly, the BDO failed to appreciate that for most of that 45-day period, the IRP was in control of BYJU’S and only the IRP could provide the answers they were seeking.
Indeed, during the first meeting of the Committee of Creditors held on 3rd of September 2024, the IRP explicitly noted that he had repeatedly reached out to BDO for clarification during the last 45 days but had received no response. BDO’s lack of communication with the IRP is surprising and suspicious.
Middle East Party transactions: Regarding the transactions with our Middle East partner in respect of which BDO had sought clarifications in its email of July 17, we wish to make it clear that the suspended Board and management of BYJU’S, had taken the proactive step of arranging a forensic audit, fully transparent and supervised by BDO, to ensure that there were no issues well before their email on July 17. However, the forensic could not be completed due to the initiation of the insolvency proceedings on July 16, 2024. The failure to complete the forensic therefore cannot be attributed to the suspended Board.
Additionally, its’ important to note that in the virtual board meeting of FY22 , the same foreign transactions were greenlighted resulting in an audit report which was clean. A BDO senior partner has also confirmed on video that after conducting thorough due diligence, they have found no evidence of fraud or malpractice in our international transactions.
While we hope that the insolvency admission order will be vacated by the Hon’ble Supreme Court very soon, until such time as the Resolution Professional (RP) is in control of BYJU’S, we wholeheartedly welcome the RP taking the lead in conducting a forensic audit into this specific matter. We are prepared to extend every possible support to facilitate the full audit process.