Mohandas Pai, ex-SBI chairman to join Byju’s advisory council

BENGALURU (Reuters) -Early Byju’s investor Mohandas Pai and former State Bank of India chairman Rajnish Kumar will join a council aimed at addressing corporate governance issues at the edtech startup roiled by government scrutiny and a spate of high-profile resignations.

The council will mentor Byju’s board and its CEO Byju Raveendran on crucial matters, the company said in a statement on Thursday.

The move comes weeks after board members representing investors Peak XV, Prosus and the Chan Zuckerberg Initiative stepped down. Byju’s auditor Deloitte also resigned saying the startup had not submitted its financial papers for fiscal 2022.

“As part of the advisory council, I look forward to advising the leadership in evolving the systems of governance and financial reporting,” Pai, who first invested in the company via his venture firm Aarin Capital in 2013, said in the statement.

Last month, Pai told Reuters in an interview that the startup – once India’s most valued at $22 billion – had not paid enough attention to governance.

“My discussions with Byju and Divya (Gokulnath) convinced me that they are dedicating sincere efforts to steer a course correction of the company’s governance structure,” said SBI’s Kumar, currently chairperson at payments startup BharatPe which was rocked by governance issues in 2022.

The slew of resignations dealt another blow to Byju’s already mired in corporate governance troubles. The firm has been raided over suspected violations of foreign exchange laws and possibly faces tightened scrutiny from the Indian government’s Ministry of Corporate Affairs (MCA).

The MCA ordered an inspection into the startup’s account books and has sought a report in six weeks, Bloomberg News reported Tuesday.

However, a law firm advising Byju’s told Reuters that the company had not yet received any communication from the MCA.

The startup is also locked in a legal dispute with its lenders over restructuring a $1.2 billion term loan.

Byju’s has laid off thousands of employees over the last year and saw its valuation marked down twice this year by investor Blackrock.

Meanwhile, the company has told investors that it would file its 2022 financial papers by this September while the results for last fiscal would be filed by December, a person with direct knowledge of the matter told Reuters.

(Reporting by Nandan Mandayam in Bengaluru; editing by Eileen Soreng)