Congress MP Karti urges anti-fraud regulator to probe Byju’s financing

Update: 2022-07-22 10:17 GMT
Karti Chidambaram, MP from Tamil Nadu's Sivaganga, was previously too allowed to go abroad.

Congress MP Karti Chidambaram on Thursday (July 21) tweeted that he has urged the Serious Fraud Investigation Office (SFIO), the country’s anti-fraud regulator, to probe the funding model of education technology company Byju’s.

“I have written to the #SFIO to look into the financing of @BYJUS it’s imperative that a thorough investigation is launched. @MCA21India@sequoia,” Karti, tweeted sharing a copy of his letter to SFIO.


 

In the letter, Karti drew the SFIO’s attention toward the “grave allegations against the company concerning its finances,” underlining three major issues that need to be probed.

Also read: ‘Fired without reason’: BYJU’S employee recounts horror on LinkedIn

Karti said the company’s $800-million (₹6,401 crore) funding round raised in March this year needs to be probed as it may involve a fraud.

Sumeru Ventures, Vitruvian Partners and BlackRock were said to have funded the round, while Byju’s founder Byju Raveendran himself made a personal investment of $400 million (₹3,200 crore).

However, Byju’s filing with the Union Ministry of Corporate Affairs showed no contribution by Sumeru Ventures and BlackRock, Karti said.

“This raises a question of the missing ₹2,500 in the company’s funding. One of the investors, Sumeru Ventures, founded in 2018, made three sizeable investments, all between February and April 2022, including one in Byju’s, after lying dormant for three years,” Karti said.

The Congress MP also urged the anti-fraud regulator to investigate the investment of ₹1,200 crore allegedly made by Oxshott Capital Partners in Byju’s in October 2021, which the latter refuses to have received. Interestingly Oxshott Capital Partners has made only one investment so far – in Byju’s, Karti said.

He also pointed out that the edtech giant is yet to get its financial statements for the financial year 2020-21 audited from its auditor Deloitte while the last date of filing the Cost Audit Report to the Union Ministry of Corporate Affairs expired on October 31, 2021.

“This is in clear violation of Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2004,” Karti said.

Also read: On sacking 2,500 staffers, Byju’s says it is only ‘optimising’ its teams

“At a time when Byju’s proposes to expand its business and acquire Nasdaq-listed company 2U at valuation of USD 2.4 billion, while parallel firing employees to cut costs, it becomes pertinent to review the company’s finances,” he said urging the SFIO to launch an investigations into the alleged financial loopholes.

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