What’s the news: MP Karti P Chidambaram on July 21 demanded that the Serious Fraud Investigation Office (SFIO) review the financial statement of ed-tech company Byju’s alleging financial loopholes. “At a time when Byju’s proposes to expand its business and acquire Nasdaq-listed company 2U at valuation of USD 2.4 billion, while parallelly firing employees to cut costs, it becomes pertinent to review the company’s finances. In light of these financial loopholes, I urge the SFIO to launch an investigation into the finances of Byju’s,” said Chidambaram in his letter. https://twitter.com/KartiPC/status/1550021424164663297 Why this matters: In the past, Chidambaram has likened ed-tech companies to “loan sharks” that prey upon economically-disadvantaged groups. Byju’s is the most valued start-up in India. As per the MP’s letter, it is also the thirteenth-most valued start-up globally. Despite this fame, the Consumer Affairs department recently noted complaints of “aggressive mis-selling to parents” and ‘trumped-up advertisements’ against Byju’s. There were also complaints against other ed-tech entities. The Indian Ed-tech Consortium (IEC) earlier published a memorandum calling for ethical and transparent policies for marketing, sales and financial policies. Even the Ministry of Consumer Affairs (MCA) warned the companies about ‘stringent’ regulations if industry self-regulation failed to curb unfair trade practices. What’s up with Byju’s? Chidambaram listed three news reports to the SFIO regarding Byju’s financial discrepancy. In July, the Morning Context reported how funds worth ₹ 2,500 crore were missing from Byju’s funding. The ed-tech in March claimed to have raised USD 800 million from Sumeru Ventures, Vitruvian Partners…
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