Govt weighs SFIO probe after auditor exit at Byju’s

livemint.com:

The ministry of corporate affairs is exploring the possibility of involving the Serious Fraud Investigation Office (SFIO), which has experts from different arms of the government, to probe the auditor resignation and delayed financial reporting by Think and Learn Pvt. Ltd, which runs online tutor Byju’s, two people familiar with the development said.

The ministry has already examined the legalities and the procedures for making a reference to SFIO over the last few days, one of the people cited above said on condition of anonymity. Although the Registrar of Companies (RoC) is empowered to inspect books of accounts, SFIO is being considered for a probe as it is a multidisciplinary agency armed with experts across disciplines, including accountancy, forensic auditing, information technology, banking, law, capital markets and taxation.

It comes in the context of the former auditor, Deloitte Haskins & Sells LLP, explaining its inability to commence an audit for FY22 financial statements due to delays in accessing financial statements and the underlying books of account. Financial statements for FY22 should have been placed before shareholders at an annual general meeting by September 2022.

Deloitte, however, did not refer to any ‘non-cooperation by the management’, ‘financial irregularities’ or ‘fraud’ in its letter to the board of the company last month while tendering its resignation, a factor that is likely to weigh on the government’s regulatory response to the alleged compliance defaults in the edtech company. Resigning statutory auditors are also required to inform the authorities about the circumstances of their decision.