The ongoing feud between Byju’s and its investors escalated on Thursday as the edtech giant announced that neither its co-founder and CEO, Byju Raveendran, nor any board members would participate in the extraordinary general meeting (EGM) scheduled by select investors for Friday.
Key investors of Byju’s will be moving forward with the EGM, aiming to vote for the removal of Byju Raveendran from his position as CEO.
In a statement, Byju’s labeled the EGM as procedurally invalid, citing contractual violations of their Articles of Association (AOA) and Shareholders’ Agreement (SHA), along with legal infractions against the Companies Act, 2013. The company emphasized that without Byju Raveendran or any board member’s attendance, the EGM lacked the necessary quorum to discuss or vote on the agenda items.
The brewing conflict stems from the investors’ discontent with Byju Raveendran’s leadership amid regulatory challenges and financial strain faced by the company.
Contrarily, sources representing the investors affirmed the validity of the EGM, asserting its compliance with relevant laws.
The Karnataka High Court, on Wednesday, ruled that resolutions proposed during the meeting called by select investors, seeking to appoint a new board and oust the CEO, would remain suspended until the final hearing on March 13. This decision followed a petition filed by Think & Learn Private Ltd, the parent company of Byju’s.
Byju’s contended that certain investors, including General Atlantic, Chan Zuckerberg Initiative, MIH EdTech Investments, Own Ventures, Peak XV Partners, SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, Sofina, and T. Rowe Price Associates, had breached the AoA, SHA, and Companies Act, 2013, by convening the EGM on February 23.
Meanwhile, the Enforcement Directorate (ED) has instructed the Bureau of Immigration (BOI) to issue a lookout circular (LOC) against Byju Raveendran. This development comes amid an ongoing investigation by the ED’s Bengaluru office into alleged Foreign Exchange Management Act (FEMA) violations involving the company and its founder. An LOC ‘on intimation’ was reportedly issued against Byju Raveendran over a year and a half ago.
