Byju's investors call for EGM on Feb 23 to oust Byju Raveendran, family members from company board

A group of key investors of embattled Byju's has called for an extraordinary general meeting on February 23 (Friday) to oust its founder CEO Byju Raveendran and his family members over "mismanagement and failures" at the edtech. The shareholders, who have called the EGM, collectively hold more than 30 per cent stake in Byju's, whereas Raveendran and family own about 26 per cent in the company.

At present, the company board has Raveendran, his wife and co-founder Divya Gokulnath and his brother Riju Ravindran.

The Extraordinary General Meeting (EGM) notice calls for ouster of the current board of Think & Learn, the firm that operates Byju's, news agency PTI said on Tuesday.

The notice sent by the investors listed has alleged financial mismanagement, erosion of value due to management's failure to enforce the company's legal rights and concealment of material information.

"The request for an EGM is supported by a consortium of Think & Learn (T&L) shareholders and follows earlier notices of requisition sent to the T&L board of directors in July and December 2023, which were disregarded..."

"The resolutions being put forward for the EGM to consider include a request for the resolution of governance, financial mismanagement and compliance issues; the reconstitution of the board of directors, so that it is no longer controlled by the founders of T&L; and a change in leadership of the company," the investor group had said.

As per the notice, BYJU'S shareholders requested meetings with the board of directors in July and December, but their requests were ignored. BYJU'S investors do not have voting rights regarding the CEO or management changes according to the shareholder agreement.

Earlier this month, South Africa's Prosus, Peak XV Partners (formerly Sequoia Capital), General Atlantic, Sofina, The Chan Zuckerberg Initiative, Owl Ventures, and Sand Capital issued a joint statement seeking change of guard at the company.

Think and Learn is learnt to have received a commitment of $300 million from investors for its ongoing rights issue which will close by the end of February. 

Sources told PTI that the EGM notice detailing alleged financial mismanagement stated that the company management failed to explain about the show cause notice by Enforcement Directorate (ED) on alleged contraventions, failure to resolve term loan with lenders, conflict with BCCI over sponsorship and Raveendran allegedly misleading shareholders about a term loan.

Besides this, the investors have levelled charges such as failure to complete the audits, and delay in payment of statutory obligations, including taxes deducted at source, provident fund deductions and contributions.

There is also the allegation of delay in payment of obligations to employees, including final settlement to staff who have left the company.

The notice also alleged erosion of value due to management's failure to enforce company's legal rights in order to recover about Rs 1,400 crore of billings and also paying out Rs 300 crore of commission to the firm's affiliated reseller in Dubai.

The notice said that the management failed to enforce the company's rights against the Blackstone entities and J C Chaudhry to ensure that its entitlement to their Aakash shares is upheld.

Former State Bank India chairman Rajnish Kumar and ex-Infosys CFO Mohandas Pai are part of Byju's board advisory council, which was formed in July last year after the resignation of board representatives from Prosus, Peak XV and Chan Zuckerberg Initiative.

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