The Ministry of Corporate Affairs (MCA) refuted reports late Wednesday evening claiming that Byju’s has been cleared of financial fraud in an ongoing investigation.
As reported by Bloomberg, which was carried by multiple media platforms, an investigation by the Ministry of Corporate Affairs has revealed lapses in Byju’s corporate governance but found no evidence of financial fraud.
These reports claimed that the ministry’s year-long investigation revealed no signs of wrongdoing such as fund siphoning or financial account manipulation, citing sources familiar with the matter.
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In a statement, the MCA said, “It is categorically clarified that such reports are factually incorrect and misleading. The proceedings initiated by MCA under the Companies Act, 2013, are still ongoing, and no final conclusion should be drawn in this matter at this stage.”
Notably, Prosus, an investment firm owned by Naspers, on Tuesday announced that it had written off the value of its 9.6% stake in Byju’s. The company cited a significant decrease in value for equity investors.
This move reflects Byju’s severe financial difficulties as the firm’s valuation has plummeted, with many financial investors now valuing the company close to zero.
When at its peak, the edtech company was valued at $22 billion. It saw significant growth during the Covid-19 pandemic, but as infections decreased and classrooms reopened, its cash reserves dwindled.
Byju’s valuation has been marked down by its early backers, including Prosus. The recent $200 million rights issue at a $225 million valuation represents a 99% discount from its peak valuation of $22 billion.
The financial woes have been accompanied by significant departures at the executive and board levels over the past year.
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