Credits: Wikimedia commons

Byjus’ week just went from bad to worse, amid an unravelling flurry around the company’s corporate governance practices, from some of its largest investors and shareholders. Yesterday it was Prosus NV, and this time, the former board member in question is Peak XV Partners, formerly known as Sequoia Capital India. Peak XV Partners is the second-biggest institutional shareholder in Byju’s.

In a letter to its limited partners (LPs), Peak XV elaborated on the reason why GV Ravishankar tendered his resignation from the board of the edtech firm. According to Peak EV, the resignation came due to a lack of internal controls at the firm, as well as a lack of transparency in providing business updates and information to the edtech’s investors. And if this is not enough, the capital market company added that it intends to significantly mark down the value of its holding and investment in the edtech major.

“We are writing to inform you that we will be marking down our investment in the company in the coming reporting cycle of the applicable Peak XV funds. The marking down of our investments reflects our lack of visibility into the company’s up-to-date audited financials and our inability to influence the company to take corrective measures,” read the letter by Peak XV Partners to its LPs.

“For several quarters, we and other investors have made continued efforts and sent numerous notices to the company’s management in an effort to obtain more accurate information and to push the company to improve transparency, internal controls, and governance processes”, the letter added. None of them managed to yield results, so far.

These recent developments paint a disturbing picture for Byju’s, which already suffered a significant hit to its valuation earlier this year (now reduced to $5.1 billion). The startup also initiated several cost-cutting measures over the past seven months – including the conduction of layoffs at its organization. And its financials have already landed the startup in hot waters, apart from a liquidity crunch – its books attracted an alarming amount of government scrutiny and resulted in raids in Byju’s offices by the Enforcement Directorate in late-April.

The delays in the filing of the earnings also resulted in Byju’s losing Deloitte, its auditor – whose term was originally supposed to end in 2025, while three other board members parted ways with the board. Apart from GV Ravishankar, a managing director at Peak XV Partners, the others are Russell Dreisenstock of Prosus (previously Naspers), and Vivian Wu of the Chan Zuckerberg Initiative.

Byju’s has now pledged to file the audited earnings for the previous year by September, and the earnings for 2023 by the end of the year, while founder Byju Raveendran proposed the formation of a Board Advisory Committee (BAC) to advise and guide the CEO. Nonetheless, it seems to come too little too late, and this week, Prosus NV blamed the startup’s poor corporate governance, stating in a public statement that the same was responsible for its exit from the edtech’s board.