Congress MP Karti Chidambaram, on July 21, wrote to corporate fraud regulator, Serious Fraud Investigation Office (SFIO), urging a probe into the finances of edtech giant, BYJU’s. Chidambaram laid out details about the funding accumulated by the edtech, including an influx of capital from Sumeru Ventures, BlackRock, and Vitruvian Partners. CEO and founder, Byju Raveendran, made a personal investment of Rs 3,200 crores in the total influx.
“I have written to the FIO to look into the financing of BYJU’s it is imperative that a thorough investigation is launched,” tweeted Chidambaram tagging the Ministry of Corporate Affairs and Sequoia Capital, one of the investors of BYJU’s. Along with the tweet, Chidambaram also attached the letter he sent to the statutory investigating agency. In the letter, the Congress leader highlighted “three key issues” that SFIO needs to focus on and bring to its urgent attention.
“A report pointed out that BYJU’s filings with the Union Ministry of Corporate Affairs indicate that 16,031 Series F preference shares were allotted to Vitruvian Partners on March 29, 2022 for Rs 571 crore. There has been no such filing in the case of Sumeru Ventures or BlackRock since the company’s announcement on March 17,” the letter read. It added, “This raises a question of the missing Rs 2,500 crore in the company’s funding.”
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— Karti P Chidambaram (@KartiPC) July 21, 2022
Another glaring loophole that Chidambaram mentioned was a Rs 1,200 crore funding from a firm called Oxshott Capital Partners. The investment, said to have been made in October 2021, has still not been confirmed by BYJU’s officially. The letter also mentioned a violation committed by BYJU’s.
Citing a news report dated July 2, 2022, Chidambaram mentioned that the edtech giant has not yet filed its Cost Audit Report for the fiscal year 2020-21 to the Ministry. The last date to do so was October 2021. The platform is yet to receive its financial statements from Deloitte, BYJU’s auditor. “This is in clear violation of Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014,” the letter read.
The probe was requested by Chidambaram when BYJU’s, touted as the world’s most valued ed-tech platform with net worth of $22.6 billion, is looking to expand, while parallelly cutting costs. The company recently announced its plan to acquire Nasdaq-listed 2U for $2.4 billion, which was mentioned in the letter as well.
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