The Ministry of Corporate Affairs in India has initiated an inspection into the financial records of edtech startup Byju’s and has requested a report within six weeks, according to Bloomberg News. The ministry will review the findings and determine whether to escalate the matter to the Serious Fraud Investigation Office (SFIO), which operates under the Ministry of Corporate Affairs.

A law firm representing Byju’s has stated that the company has not yet received any communication from the ministry. In the event of a routine inspection, Byju’s is prepared to fully cooperate and provide necessary explanations and clarifications, as per Zulfiquar Memon, a managing partner at MZM Legal.

Byju’s has faced various challenges recently, including the delayed submission of its financial statements for fiscal year 2022. This led to the resignation of Deloitte as the company’s auditor and the departure of three board members. Byju’s has informed investors that it intends to file the financial statements by September and the results for the last fiscal year by December.

The company, once valued at $22 billion, attracted significant investment during the COVID-19 pandemic when online education services saw a surge in demand. However, Byju’s has encountered additional issues, such as falling behind in payments to a national pension fund. The company has since rectified the payment shortfall. It has also faced scrutiny from financial crime-fighting agencies regarding potential violations of foreign exchange laws and is engaged in a legal dispute with lenders over a $1.2 billion term loan.

Further details and comments from the Ministry of Corporate Affairs are awaited.

Reporting by Jyoti Narayan and Nandan Mandayam in Bengaluru; Editing by Savio D’Souza and Dhanya Ann Thoppil