The Annual General Meeting (AGM) of Byju's, held on December 20, was marked by significant shareholder unrest and a notable absence of the statutory auditor, MSKA and Associates, in the initial phase.
The meeting, lasting three hours, was anything but smooth, with shareholders expressing dissatisfaction and abstaining from passing resolutions, including the approval of the audited FY22 financials and the appointment of MSKA & Associates for a five-year term.
Auditor concerns and financial challenges
Senior auditor Manish Makhija from MSKA and Associates, who joined later, raised serious concerns about Byju's financial health.
He highlighted a "significant gap" between the company's assets and liabilities and pointed out issues like ongoing cash burn and obligations concerning Term Loan B. Makhija expressed skepticism about the company's ability to strengthen controls before the financial year 2024 and flagged significant shortcomings in Byju's internal controls.
Byju's response and future plans
Despite the challenges, Byju Raveendran, Founder and CEO, reassured shareholders and promised another meeting for further discussion.
India CEO Arjun Mohan presented Byju’s 3.0 plan, focusing on a hybrid model of online and offline educational services and strategies to enhance productivity. The company also plans to sell key assets like Epic and Great Learning to address its liquidity crisis.
Byju's, India's most-valued startup, has faced scrutiny for issues ranging from accounting irregularities to mass layoffs. The company reported a consolidated revenue of Rs 5,015 crore in FY22 but also witnessed an expanded loss of Rs 8,245 crore. Investor Ranjan Pai has invested significantly in Byju’s test-prep subsidiary and is in discussions for further investment.
Approval of resolutions and way forward
Despite the stormy proceedings, all resolutions, including the FY22 accounts and the remuneration of Rs 5,00,000 for B Y & Associates, the cost auditors, for the financial years 2021-22, 2022-23, and 2023-24, were eventually passed. Byju's faces the challenge of navigating through its financial difficulties while maintaining trust among its shareholders and customers.
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