The Ministry of Corporate Affairs (MCA) refuted the reports, claiming that Byju’s has been cleared of financial fraud in an ongoing investigation by the ministry. As reported by Bloomberg, which was carried out by multiple media platforms, an investigation by the Ministry of Corporate Affairs uncovered lapses in Byju’s corporate governance but did not find 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. The MCA, in its statement, 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, announced on Tuesday 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. 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% decline 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.