Byju Raveendran & family in firing line: Investors meet today to decide founder's fate

All eyes are on the extraordinary general meeting called by some select Byju's investors today that seeks to oust founder CEO Byju Raveendran and his family over alleged mismanagement and failures.

Raveendran said he nor any other board member will be attending the meeting, calling it "procedurally invalid" and contractually in contravention of the company's article of association and shareholder's agreement.

"It is with firm resolve that I inform you that neither I nor any other Board member will attend this invalid EGM. Under the AOA and the SHA, the attendance of at least one of the Founders is necessary to form the quorum for a valid EGM," he wrote in a letter to shareholders.

Investors who called the meeting said it was valid and fully in accordance with applicable law. "EGM to continue as per plan, they said, adding that it would be incorrect to say that EGM won’t have quorum if founders don’t attend. 

Byju's has obtained a stay from the high court that prohibits the implementation of any resolutions passed during the EGM until the next hearing. 

But the court refused to stop the emergency shareholder meeting from going ahead. The matter pertains to the acquisition of the company in 2021 for $950 million, with around 70% paid in cash and the remaining to be adjusted against Think & Learn equity. 

Byju's management has been accused of withholding important information from investors, reflecting the divide between the
company and some of its key stakeholders.

They have been charged of  failing to disclose trading financials and material discrepancies between guidance and actual results, along with inaccurate disclosure of available capital, leading to a misrepresentation of short-term capital sufficiency.

The investors have also sought information on investigations by the Directorate of Enforcement (ED), the MCA and the Serious Fraud Investigation Office (SFIO).

They also allege that the management repeatedly breached obligations that were listed in the shareholding agreement and articles of association and failed to provide essential financial data, cap tables, M&A transaction details, debt negotiations and other information. 

The next steps that the shareholders have proposed are evaluating the status of CEOs and CFOs across entities, establishing interim succession plans, and potentially appointing a third-party temporary CEO for all the entities.