BYJU’S family trio declines attendance at investor-convened EGM

BYJU'S Founder and CEO Byju Raveendran, along with his wife and Co-founder Divya Gokulnath, and his brother Riju Ravindran—all current members of the company's Board—will not participate in the extraordinary general meeting (EGM) called by certain investors.

“This EGM is procedurally invalid, contractually in contravention of our AOA (Articles of Association) and SHA (Shareholders’ Agreement), legally on the wrong side of the Companies Act, 2013. Byju Raveendran or any other Board member will not attend this invalid EGM. This means the EGM, if it is still summoned, will not have the required quorum and cannot proceed to discuss or vote on the agenda,” a BYJU’S spokesperson said in a statement.

“As custodians of BYJU'S, it is the responsibility of the founders to respect the established procedures of law and protect the company's integrity,” the spokesperson added.

This marks the most recent development in a sequence of events involving the troubled edtech company and several of its prominent investors who called for the EGM to address persistent concerns within BYJU’S.

However, the EGM is valid and fully in accordance with applicable law, proceeding as planned, investor sources claimed, who noted that it’s incorrect to claim that the EGM won’t have a quorum if founders don’t attend.

The proposed resolutions for the EGM, which is expected to take place on February 23, include addressing governance, financial, and compliance issues; restructuring the Board to reduce founder control, and changing the company’s leadership.

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The group of investors are “deeply concerned about the future stability of the company under its current leadership and with the current constitution of the Board”, they had said in a statement earlier this month.

The request for an EGM follows earlier notices of requisition sent to the Think and Learn Private Limited Board of Directors in July and December 2023, which were disregarded by the company, according to the statement from the group of investors.

On February 21, the Karnataka High Court issued an interim order stating that decisions made by BYJU’S shareholders in the February 23 EGM shall not be given effect until the next hearing. The next listing of this matter is on March 13, 2024, as per the order.

Earlier on Thursday, it was reported that the Enforcement Directorate had approached the Bureau of Immigration earlier this month to issue a fresh lookout circular against Raveendran to ensure that he does not leave the country.

These developments come amid a severe liquidity crisis at the edtech company. The $200 million rights issue, initiated last month at a 99% lower valuation, is likely to serve as crucial financial support for the cash-strapped firm, offering the necessary capital to address immediate liabilities.