BYJU's Crisis Continues: After Prosus, Peak XV Explains Decision to Leave the Board The venture capital firm, which is the second-largest institutional shareholder in the edtech unicorn, informed LPs that Ravishankar's decision to resign from the board of directors was due to BYJU's lack of openness when it came to providing investors with financial updates and information.

Peak XV Partners has written to its Limited Partners (LPs) to explain the reasoning for GV Ravishankar's decision to step down from the board of BYJU'S.

The venture capital firm, which is the second-largest institutional shareholder in the edtech unicorn, informed LPs that Ravishankar's decision to resign from the board of directors was due to BYJU's lack of openness when it came to providing investors with financial updates and information.

Peak XV and Prosus each own around 7% and 9% stake of BYJU'S, respectively.

In the letter to LPs, it was stated that "the marking down of our investments reflects our lack of visibility into BYJU'S uo-to-date audited financials and our inability to influence it to take corrective measures."

They continued by saying that BYJU'S management was unwilling to follow the recommendations made by Peak XV's board representative.

Venture capitalist Prosus, based in the Netherlands, made such assertions on Tuesday. The venture capital fund stated in an official statement that its director Russell Dreseinstock's decision to leave the board of BYJU'S was triggered by his inability to uphold his fiduciary obligation to serve the long-term interests of the company and its stakeholders.

The executive leadership at the edtech company, they said, regularly disregarded Prosus representatives' strategic, operational, legal, and corporate governance advice and recommendations.

According to Prosus' statement, "Executive leadership at BYJU'S regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance issues, despite repeated efforts from our Director."

They continued, "It became evident that our Director was unable to fulfil his fiduciary duty to serve the long-term interests of the Company and its stakeholders, and the decision for him to resign from the BYJU'S Board was made as a result."

Peak XV also made clear that they intend to devalue their investment in the business.

In the upcoming reporting cycle, "We plan on significantly writing down our investment in the company," the letter said.

Peak XV LP letter, which was sent a few days ago, and Prosus' declaration on Tuesday follow Byju and its lenders' announcement that they would agree on modifications to the terms of the company's USD 1.2-billion term loan B. This should hasten loan disbursement and put an end to the parties' legal dispute.

On June 22, Deloitte announced its resignation as Byju's official auditor due to a backlog in obtaining the company's FY22 financial statements , while the investor-appointed board members formally announced their resignation on June 23. Following Deloitte's exit, the company named BDO (MSKA & Associates) as its statutory auditor for a period of five years, starting in FY22.

Byju Raveendran, the company's co-founder, and Ajay Goel, its chief financial officer, told investors on June 24 that the company's audited FY22 financials would be filed by September, while those for FY23 would be released by December of this year.

After an 18-month wait, Byju's released its FY21 financials on September 14 of last year, indicating a loss of INR 4,588 crore on revenue of INR 2,280 crore.