Byju's Calls Shareholders Decision To Oust CEO 'Invalid'
In a dramatic turn of events, Byju”s has dismissed the decision made by its shareholders on Friday to remove CEO Byju Raveendran as “invalid.” The move follows a tumultuous extraordinary general meeting where investors voted to oust Raveendran and overhaul the board of directors.
The meeting, attended by at least two dozen investors including prominent names like Prosus, General Atlantic, Sofina, and Peak XV Partners, saw a heated confrontation between stakeholders and management. The investors, backed by Tiger Global and Owl Ventures, had filed a petition challenging Byju”s $200-million rights issue, alleging suppression of investor rights and mismanagement.
Byju”s contested the validity of the resolutions passed during the meeting, citing the absence of any founder-directors, including Raveendran himself. According to the company, the presence of at least one founder-director is necessary to form a valid quorum, which was not met.
“The resolutions passed during the recently concluded extraordinary general meeting – attended by a small cohort of select shareholders – are invalid and ineffective. The company said at least one founder-director must attend the meeting to form a valid quorum, but it was not met since neither Byju Raveendran, his wife or his brother were present. This renders the resolutions taken at the meeting as “null and void,” the statement from Byju”s said.
Prosus NV and Peak XV Partners, among others, had voted to remove Raveendran, reflecting growing dissatisfaction with his leadership amidst the company”s struggles. However, the impact of this decision will be on hold until March 13, pending a challenge by Raveendran in the Karnataka High Court.
Reports surfaced of disruptions during the Zoom call involving investors and management, with attempts by unidentified individuals to crash the meeting, adding to the chaos surrounding Byju”s and its ongoing battles with investors.
Last week, the Enforcement Directorate (ED) has reportedly issued a look-out notice against Byju Raveendran. ANI, citing sources, reported that ED made this crucial move today, February 22. The report also said that this aims to prevent Byju Raveendran from leaving India.
In recent years, the ed-tech giant has witnessed a dramatic decline in both popularity and valuation. Meanwhile, the Hindustan Times reported that ED has renewed its lookout circular as part of its Foreign Exchange Management Act (FEMA) investigation. HT, citing people familiar with the matter, also said that the circular was renewed earlier this month with a provision that the probe agency should be informed about Byju Raveendran leaving the country.
