India has started an investigation into financing and accounting practices at Byju’s, according to people with knowledge of the matter, after a previous inspection found corporate governance lapses at the struggling online tutoring firm.

The federal government has asked the regional office of the Registrar of Companies in Hyderabad to investigate Byju’s books to ascertain if the company misreported financial statements and whether funds were siphoned off, the people said, asking not to be identified as the matter is private.

There were shortcomings in the accounts of Byju’s, the people said, explaining the reason for the new probe. They didn’t specify what those failings were. The registrar’s office has one year to submit its report.

Dhiraj Singh/Bloomberg

Byju’s, once India’s most valued startup, is fighting for its life in courts in India and the U.S. India’s top court last month struck down a bankruptcy tribunal’s order that allowed Byju’s to settle debts with a key creditor, pushing the online tutor back firmly into the insolvency process. The Bangalore-based company is now pleading its case in a lower court. The control of the firm currently rests with an insolvency resolution professional.

Emails to the spokesperson for India’s Ministry of Corporate Affairs and the insolvency resolution professional went unanswered.

A previous yearlong inspection by the Ministry of Corporate Affairs found corporate governance lapses at Byju’s but no evidence of wrongdoing, Bloomberg News reported in June.

Its founder Byju Raveendran has said that his startup, once worth $22 billion, is now valued at zero. Some of Byju’s large backers such as Prosus NV have written off their investments in the firm.

A Republican sweep in November’s U.S. election threatens a niche tax break that helps American colleges to upgrade dorms and academic buildings on their campuses for cheap. 

There are more than 1,700 private, nonprofit colleges and universities in the U.S. which can sell tax-free bonds for infrastructure projects, providing a lower cost of debt than a traditional loan. After the GOP took the House, Senate and White House, colleges’ tax-exempt benefit is at risk as lawmakers look for ways to offset the cost of extending tax cuts, according to muni analysts. 

“The private higher-education sector is probably one of the more vulnerable muni sectors,” as policymakers will likely have it in their sights, said Mikhail Foux, a strategist at Barclays Plc, in a November research note. 

Joe Buglewicz/Bloomberg

Elite colleges have become a target of Republican lawmakers in the wake of controversies over campus antisemitism and protests against the Israel-Hamas war in Gaza. GOP officials also view schools as having become too progressive and intolerant of conservative ideas.

President-elect Donald Trump said schools could lose their accreditations and federal support, while his key backer, Tesla Inc. boss Elon Musk, alleged “something is seriously wrong” with elite universities. Vice President-elect JD Vance last year proposed legislation raising the tax on endowments of the wealthiest colleges.

That rhetoric has sparked concern over a potential repeal of the schools’ bond perk as lawmakers search for new revenue to extend Trump’s 2017 tax cuts. During Trump’s first term, lawmakers proposed curbing the sale of private activity bonds as part of their tax overhaul. Such debt can be issued by public agencies on behalf of colleges, hospitals, airports, affordable housing developers, and other charities and nonprofits. 

Chuck Samuels, a lawyer at Mintz, said he’s concerned that private activity bonds could be a target. He works as counsel to the National Association of Health and Educational Facilities Finance Authorities, a group of entities that can sell bonds on behalf of nonprofit borrowers. 

Samuels urged non-profits to explain the importance of tax-exempt bonds to their members of Congress. “We’ve been through it before and we need to be ready to deal with it,” he said. 

Colleges have roughly $179 billion of tax-exempt debt outstanding, according to data compiled by Bloomberg. The schools often tap the market to finance campus renovations or expansion efforts. From small liberal-arts schools to giant universities, the institutions have been on a borrowing binge this year to spruce up their campuses and lure the next generation of students.

Lower yields

The tax benefit allows them to offer lower yields than benchmark debt. Long-dated, top-rated tax-exempt yields are about 85 basis points lower than 30-year Treasuries, according to data compiled by Bloomberg. Analysts have speculated that any change to the tax-exemption would affect future bond sales. That would make existing tax-free securities more valuable.

To be sure, some municipal bond experts view a reduction in the tax-exemption as less of a possibility. No specific proposal on college bonding has been made. Analysts at Municipal Market Analytics, an independent research firm, said that the private-activity bond statuses are most at risk, followed by an elimination for housing or hospitals.

Curbing the use of tax-exempt muni bonds wouldn’t raise much revenue for the federal government. It is estimated to cost about $3 billion a year to provide the exemption on bonds sold for private nonprofit education facilities, according to the Treasury Department.

If there were restrictions imposed, wealthy institutions like Ivy League schools would likely shift to the taxable bond market, where they already often sell debt. Those deals are typically large and have high credit ratings.

The impact would be most acute on smaller institutions with lower credit ratings, which may have a tougher time accessing that market. Such schools are already pressured by dwindling enrollment and a challenged demographic outlook as the number of high-school seniors declines. 

“Reduction or elimination of access to tax-exempt bonds is likely to accelerate the closure of smaller private colleges,” said Malcolm Nimick, president of Ascension Capital Enterprises LLC, a financial advisory firm. 

Can you imagine stepping into a time machine while also peeking into the future? Seems weird, right? But that’s exactly how it felt at the Accounting Today Private Equity Summit!

You see, there was an entire room full of traditional, boomer-aged white men in jackets and suits. It very much felt like an accounting conference from a decade ago. But there was a big forward-looking twist — discussion around PE investment in accounting firms. When money talks, out come the polished shoes and tailored blazers!

If you missed it, here’s what made this event a mix of nostalgia and fresh ideas:

Alan Klehr

One room, one crowd, big conversations

The setup was perfect for this topic. There were 300 people in one room, with no breakout sessions to split focus. Everyone had access to the same panels and fireside chats, which meant no FOMO (fear of missing out). And the networking breaks? A dream. Long enough to chat, mingle and snack on donuts or sip some wine.

The discussions were real. It wasn’t all sunshine and rainbows. The panels included firms that had taken PE money sharing their journeys. They talked about the wins, the hurdles and everything in between. And — surprise — not everyone thought PE was the “greatest thing ever.” However, most agreed it brought more positives than negatives.

Fresh cash for fresh ideas

One big takeaway was the opportunity for younger talent. PE introduces a way for high-potential employees to get a piece of the pie early. Forget waiting 15 years to become a partner. With PE, star players can reap financial rewards sooner, boosting retention and motivation.

And PE isn’t about partners cashing out. It’s about reinvesting in technology, hiring top talent and upgrading firm operations. That means firms can compete better, evolve faster and establish sustainable business models.

Busting myths about PE

Some people who walked into that room (and a number of you reading this) may think PE is all about greed. But is it really? Think about the partnership model in traditional firms — partners often pull profits without reinvesting in the business. PE firms, on the other hand, might tighten the ship financially, but they also bring in accountability and growth strategies.

And here’s a fun fact … many PE investors represent pension funds and other institutions. So, in a way, your grandma’s retirement fund might be backing your firm’s transformation. How’s that for perspective?

The big industry shift

PE isn’t for every firm. They are picky. They are looking for well-run businesses with solid growth potential. This raises the bar for everyone. If you’re competing with PE-backed firms, you’ll need to up your game. That means better metrics, stronger management and a more accountable culture.

It’s not just PE making waves. Venture capitalists, fintech and tech companies are entering the accounting space, too. They’re pushing innovation, automating processes and even taking on clients that CPAs traditionally served. The disruption is real!

The innovation dilemma

But where’s the innovation? Sure, PE brings money and management expertise, but that doesn’t necessarily translate to innovation. Technology is often mistaken for innovation, but they’re not the same. Adding automation to a broken business model doesn’t solve fundamental problems.

Firms need to rethink their DNA. Innovation should be baked into their operations, not treated as an afterthought. If PE firms don’t prioritize this, their investments could stall in the long term.

A vision for the future

The future of accounting isn’t just about taking PE money or implementing technology. It’s about reimagining how firms operate at scale. Add to that the opportunity for new players to build firms that embody cutting-edge business models, seamless tech integration and a culture of accountability and growth. Things are looking different! 

Now, imagine stepping back into that time machine, but this time you leap ahead to a vibrant, dynamic profession where firms are powered by innovation, fueled by talent and focused on client value all while balancing profitability. That’s where the real transformation lies.

Private equity might be the spark, but the transformation ahead depends on how we as a profession embrace the challenge. Are we content to tweak the old model, or are we ready to design the future? With radical change, we could create a profession that’s not just profitable but also sustainable, innovative and, dare I say, enjoyable to work in.

Change is here, and it’s exciting. Let’s make it meaningful!