Edtech giant Think and Learn Private Ltd, the parent company of BYJU’S, announced on Thursday that neither its founder and CEO, Byju Raveendran, nor any other board member would participate in the extraordinary general meeting (EGM) called by certain select investors.
At the forthcoming meeting, shareholders of BYJU’S will vote on a resolution put forward by some investors aiming to remove founder and CEO Byju Raveendran and his family members due to alleged "mismanagement and failures."
BYJU’S has deemed the EGM "procedurally invalid" and contends that it breaches the company’s articles of association and shareholder’s agreement.
"Byju Raveendran or any other Board member will not attend this invalid EGM. This means the EGM, if it is still summoned, will not have the required quorum and cannot proceed to discuss or vote on the agenda. As custodians of BYJU’S, it is the responsibility of the founders to respect the established procedures of law and protect the company’s integrity," stated a spokesperson for BYJU’S.
The founders and board members of BYJU’S collectively hold approximately 22 per cent stake in the company.
The EGM notice has garnered support from investors such as General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, who together hold around 30 per cent stake in Byju’s.
Disgruntled shareholders have tabled a resolution at BYJU’S EGM seeking the removal of founder CEO Byju Raveendran and his family members, citing alleged "mismanagement and failures" at the once-prominent Indian tech startup.
However, the outcome of the vote at the EGM will not be effective until March 13, when the Karnataka High Court will hear Raveendran’s plea challenging the move by certain investors.
While the Karnataka High Court declined to halt the EGM, called by shareholders collectively holding more than 32 per cent stake in BYJU’S, Raveendran and family own 26.3 per cent in the company.
The EGM notice calls for the removal of the current board of Think & Learn, the company behind BYJU’S, which includes Raveendran, his wife and co-founder Divya Gokulnath, and his brother Riju Ravindran.
BYJU’S has faced numerous setbacks over the past year, including challenges arising from the pandemic, financial strain following the acquisition of Aakash, the resignation of its auditor, and legal disputes in the US.
In an effort to appease investors, Raveendran pledged increased transparency in fund utilization and committed to restructuring the board, including the appointment of two non-executive directors.
The reasons cited for seeking the ouster include alleged financial mismanagement, erosion of value due to failure to enforce legal rights, and concealment of material information.
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