Edtech major Byju's troubles seem to be never-ending with the latest one being the firm being under EPFO scanner for delayed PF payments, as per a report.
MoneyControl reported on Monday that the country's most-valuable start-up has been making PF (Provident Fund) contributions with a significant delay of three to four months.
As per the data obtained by MoneyControl from EPFO (Employees’ Provident Fund Organization), Byju's made PF contributions for December 2022 in June 2023. Independent PF consultants who reviewed the data confirmed the delay in payment for most months, the report said.
The data also indicated that only around 10,000-13,000 employees received PF payments for January, February, and March, while the majority of employees are still awaiting PF payments for April and June, the report added.
As per a Supreme Court ruling in February 2022, employers are liable to cover damages if there is a delay in an employee's PF contribution. Under the PF Act, companies are required to make PF contributions before the 15th of the following month, and employees have the right to file a complaint with the EPFO against the employer for delayed payments.
If a complaint is filed, EPFO initiates an inquiry against the employer and can recover the damage amount for the late deposit. In some cases, a police complaint may be filed. However, employers are provided with a reasonable time and opportunity to present their perspective before any penal action is taken.
PF consultants, personal finance experts, and lawyers suggest that EPFO may impose penalties similar to previous cases where defaulting companies faced fines and interest under the PF Act, the report said.
Byju’s declined to comment on the alleged non-payment of employees PF. However, sources closes to company told MoneyControl that it is a reflection issue and the company has been making timely PF payments.
The potential PF non-payments add to the existing challenges faced by Byju's and its founder Byju Raveendran in recent months.
The company recently saw resignations from three of its board members - GV Ravishankar of Peak XV Ventures (formerly Sequoia Capital), Vivian Wu of Chan Zuckerberg Initiative, and Rusel Dreisenstock of Prosus.
The edtech company’s statutory auditor Deloitte also resigned last week due to differences over delayed financial statements for FY22.
Furthermore, Byju's offices were searched by the Enforcement Directorate (ED) under the Foreign Exchange Management Act, and the company is yet to file audited results for FY22.
Reuters reported on Sunday that Byju's has told investors it will file 2022 audited earnings by September and 2023 results by December.
In FY21, Byju's reported increased losses exceeding Rs 4,500 crore, despite being a year influenced by the Covid-19 pandemic, which provided growth opportunities for online learning companies.
In May, lenders accused Byju’s of hiding $500 million, while Byju’s filed a counter suit in a New York court challenging the acceleration of the $1.2-billion loan it raised in November 2021.
Founded over a decade ago by former teacher Byju Raveendran, Byju's has raised over $5 billion, with a majority of the funding obtained in the past five years.