BYJU’s Crisis: Key Shareholders of Edtech Firm Vote To Oust CEO Byju Raveendran at Extraordinary General Meeting
According to sources, holders of over 60 per cent of the cap table voted in favour of the resolutions. Given that Raveendran holds 23-25 per cent, this is a significant number.
New Delhi, February 23: Key shareholders in Byju's like Prosus NV and Peak XV Partners on Friday voted to oust Byju Raveendran as CEO at the extraordinary general meeting (EGM), saying that the stakeholders "unanimously passed all resolutions put forward for vote".
Prosus, in a statement shared with IANS, said that the resolutions included a request for the "resolution of the outstanding governance, financial mismanagement and compliance issues at Byju’s". Byju’s Saga: Company’s Co-Founder and CEO Byju Raveendran and Board Members Will Not Attend Extraordinary General Meeting Called by Key Investors.
The resolutions also included "the reconstitution of the Board of Directors, so that it is no longer controlled by the founders of T&L (Think & Learn Private Ltd) and a change in leadership of the company". Prosus said that as shareholders and significant investors, "we are confident in our position on the validity of the EGM meeting and its decisive outcome, which we will now present to the Karnataka High Court in line with due process". According to sources, holders of over 60 per cent of the cap table voted in favour of the resolutions. Given that Raveendran holds 23-25 per cent, this is a significant number.
In a statement, the embattled edtech major said the resolutions passed during the investors' EGM are "invalid and ineffective" and the passing of the "unenforceable resolutions" challenges the rule of law "at worst". The company said that the resolutions were "voted upon without the valid constitution of a quorum, as stipulated in BYJU'S Articles of Association (AoA). According to Articles 38 and 39(a) of the AoA, at least one founder-director is required to form a valid quorum".
The edtech company said that as the founders did not participate in the meeting, "the quorum was never legitimately established, rendering the resolutions null and void". The EGM was called by select investors to oust Raveendran from the company, which is facing regulatory hurdles amid a cash crunch.
On Wednesday, the Karnataka High Court ordered that any resolutions, to be passed in the EGM, will not hold ground until the final hearing and disposition of the petition on March 13, filed by Think & Learn Private Ltd, the parent company of Byju’s. Xmail: Tesla and SpaceX CEO Elon Musk Says Gmail’s Alternative Service Coming Soon.
Meanwhile, Byju’s key investors -- Prosus, General Atlantic, Sofina, and Peak XV -- moved the National Company Law Tribunal (NCLT) over its $200 million rights issue. According to investor sources, the shareholders have cited "suppression of investor rights and mismanagement of the company" in its petition to the tribunal.
(The above story first appeared on LatestLY on Feb 23, 2024 07:49 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).