EGM votes for Byju Raveendran’s removal

Bengaluru: In a significant move, more than 60 per cent of shareholders of edutech Byju’s on Friday voted for removal of founder CEO Byju Raveendran and his family over alleged ‘mismanagement and failures’ at what was once India’s hottest tech startup, but the company dug in its heels, calling the voting done in the absence of founders as ‘invalid’.

Prosus - one of the six investors, who had called the extraordinary general meeting (EGM) - in a statement said: “Shareholders unanimously passed all resolutions put forward for vote. These included a request for the resolution of the outstanding governance, financial mismanagement and compliance issues at Byju’s, the reconstitution of the board of directors, so that it is no longer controlled by the founder of T&L and a change of leadership of the company.”

However, according to the sources in the know, the meeting faced several disruptions with persons other than the investors tried to join the meeting. Also, an alleged phishing attack also took place, intimating the investors that the meeting had been cancelled. Further, the EGM, which was scheduled at 9AM on Friday, started with a phishing attack. “Attendees received a random notification from an unidentified source that the meeting is cancelled. However, it came to be a hoax. So, it started at 9AM,” said a person with the knowledge of the development.

A total of 24 investors joined the meeting along with eight Byju’s employee-shareholders, five people from the legal side.

Sources also said that it took over an hour to complete the roll call and verify attendees as hundreds of individuals attempted to join the Zoom video-conferencing link of the EGM with all kinds of names.

The meeting saw absence of Raveendran, his co-founder and wife DivyaGokulnath, and his brother Riju Ravindran who had decided not to attend the meeting. These three board members hold about 26.3 percent of the shares in Think and Learn Pvt Ltd, the parent company of Byju’s, while the investors that are seeking their ouster have a shareholding of over 30 percent. Investors including General Atlantic, Chan Zuckerberg Initiative, Owl Ventures, Peak XV Partners (formerly Sequoia Capital India & SEA), Sands Capital Global Innovation Fund, Sofina, and T Rowe Price Associates are looking at ousting the current CEO and Founder, Raveendran as they want a new board and management to take over.

Though the results of the EGM are out, an earlier court order has restricted the board from enforcing any of the decisions taken in the EGM till the next date of hearing in March.

Meanwhile, four shareholders in the edtech company on Friday filed a mismanagement and oppression suit against Raveendran in the National Company Law Tribunal (NCLT).

These investors have also sought a forensic audit of the company apart from ouster of the current CEO and his family from the board. The court filings also show that the investors moving against CEO Raveendran are seeking that the declaration of the just-concluded $200 million rights issue be deemed void, and that the company should not take any actions that will prejudice the rights of the investors.

The petition has been signed by four investors including Prosus, GA, Sofina, and Peak XV along with support from other shareholders like Tiger and Owl Ventures.

Once touted as the most valued startup of India, edtech firm Byju’s has been embroiled in series of controversies from last year. While the company was accused of mis-selling courses to parents, it also came under fire because of mass layoffs of employees in 2023.

The company is also involved in a bitter fight with some of its investors, who are looking at ouster of the Founder and his family from the board & management of the company.