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ICAI to Scrutinize Paytm, Progress Update on BYJU'S Review

Last updated: 26 February 2024

CA Ranjeet Kumar Agarwal, President of the Institute of Chartered Accountants of India (ICAI), disclosed that the Financial Reporting Review Board (FRRB) may soon discuss the recent developments surrounding Paytm, alongside its ongoing review of ed-tech giant Byju's accounts due to governance concerns. These revelations come amidst regulatory challenges faced by Paytm Payments Bank Limited (PPBL) and escalating governance issues within Byju's, indicating heightened scrutiny by regulatory bodies and investors.

Background on Paytm's Regulatory Concerns

On January 31, the Reserve Bank of India (RBI) imposed restrictions on PPBL, barring the acceptance of deposits or top-ups in any customer account, including wallets and FASTags, effective from February 29. This regulatory action was prompted by concerns regarding compliance and governance practices within the payment bank, signaling a need for closer examination by oversight bodies.

ICAI to Scrutinize Paytm, Progress Update on BYJU S Review

ICAI's Role and Deliberations

CA Ranjeet Agarwal clarified that while the ICAI has not yet deliberated on the Paytm issue, the upcoming FRRB meeting is expected to address the matter and consider appropriate actions if necessary. The newly-elected committees of the institute, including the FRRB, are slated to convene in March, indicating a proactive approach towards addressing emerging regulatory challenges and governance lapses within the financial sector.

FRRB's Review Process

The FRRB operates with a robust review structure, encompassing a three-tiered approach involving technical scrutiny, group evaluations, and board review. Empowered to scrutinize the financial statements of listed companies, the FRRB may initiate further investigations in cases of gross negligence, while providing advisory guidance for minor issues.

Byju's Governance Crisis and Investor Actions

Byju's, a prominent player in the ed-tech sector, has been embroiled in a governance crisis, with investors expressing concerns over financial mismanagement and compliance issues. In a recent Extraordinary General Meeting (EGM), investors including Prosus, General Atlantic and Peak XV voted to remove CEO Byju Raveendran and his family from the firm. However, Raveendran affirmed his position as CEO, emphasizing continuity and stability within the organization.

Legal Actions and Shareholder Disputes

The governance turmoil within Byju's escalated with four investors filing a mismanagement suit in the National Company Law Tribunal (NCLT), seeking Raveendran's removal from the board of directors. The lawsuit also calls for a forensic audit of the company, appointment of a new board and nullification of rights issue.


As regulatory scrutiny intensifies and investor discontent grows, both Paytm and Byju's find themselves navigating turbulent waters. The forthcoming discussions within the ICAI and potential legal proceedings underscore the importance of robust governance frameworks and compliance mechanisms in maintaining investor trust and regulatory compliance within India's financial landscape.

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