Prosus on Wednesday significantly slashed Byju's valuation to less than $3 billion, around 86% lower than the edtech's staggering $22 billion valuation last year. The tech investor holds 9.6% stake in Byju's parent Think & Learn Pvt Ltd.

The disclosure was made by interim CEO Ervin Tu during Prosus' earnings call. In June, Naspers-owned Prosus reduced the value of its stake in Byju's to $493 million, valuing the edtech startup at $5 billion. The Dutch investor has pumped $536 million into Byju's since 2018. In April 2021, it made an investment amounting to $153 million in India's largest edtech firm.

This comes days after the Adjudicating Authority under the Foreign Exchange Management Act (FEMA), 1999 issued show cause notices to Think & Learn Private Limited and founder Byju Raveendran on the basis of the complaint filed by the Directorate of Enforcement (ED). The company allegedly made significant foreign remittances outside India and investments abroad which were allegedly in contravention of provisions of FEMA, 1999 and caused loss of revenue to the Government of India.

ED had conducted searches at the premises of the edtech and the residence of Byju Raveendran in April and seized documents pertaining to all investments received by the company as well as documents pertaining to the overseas investments made by the company.

Byju's went on an acquisition spree over the past few years. The edtech major shelled out $2.5 billion on acquisitions that included Aakash Educational Services for nearly $1 billion, U.S.-based Epic, kids' coding platform Tynker, professional education firm Great Learning and exam prep platform Toppr.

On the conclusion of the investigation, ED found that Think & Learn Private Limited and Byju Raveendran contravened the provisions of FEMA by failing to submit documents of imports against advance remittances made outside India, by failing to realise proceeds of exports made outside India, by delayed filing of documents against the Foreign Direct Investment (FDI) received into the company, by failing to file documents against the remittances made by the company outside India and by failing to allot shares against FDI received into the company.

Earlier this year, Byju's statutory auditor Deloitte Haskins & Sells quit citing a long delay in the edtech startup's financial statements for the year ended March 31, 2022. Deloitte, which was appointed as Byju's auditor till 2025, said it has not been able to commence the audit as on date. "As a result, there will be significant impact on our ability to plan, design, perform and complete the audit in accordance with applicable auditing standards," Deloitte said in its resignation letter. Following the auditor's resignation, Byju's appointed BDO (MSKA & Associates) as its new auditor for the year commencing from FY22 for the next five years.

Along with Deloitte, Byju's investor board members from Prosus and Peak XV had also resigned.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.