NEW DELHI: An investigation conducted by the government has cleared Byju’s of financial fraud but found lapses in corporate governance at the embattled online education company, reported Bloomberg News.
The yearlong probe, carried out by the Ministry of Corporate Affairs, has revealed no evidence of fund siphoning or financial account manipulation, according to sources familiar with the matter.
However, the investigation did uncover governance deficiencies that have exacerbated Byju’s financial troubles, these sources added while speaking to the publication.
This outcome offers relief to Byju Raveendran, the company’s founder, who has faced allegations of mismanagement from discontented investors.
Last year, three major shareholders—Prosus Ventures, Peak XV Partners (formerly Sequoia Capital India), and another unnamed investor—resigned from the board over disagreements with Raveendran concerning business processes and internal controls.
The report’s conclusions suggest that, for now, the company may avoid further scrutiny from authorities on previously examined issues.
It may be noted that neither the Ministry of Corporate Affairs nor representatives from Byju’s, Peak XV, and Prosus have issued any comments on the fresh development.
The report does not specify whether Raveendran is responsible for the governance issues or if he remains suitable to lead the company. Investors have called for his removal, citing lapses in management and compliance.
Despite the absence of fraud, Byju’s continues to face significant challenges.
