BYJU’S investors discuss leadership changes and more at EGM
The EGM is an important step in a sequence of events involving the troubled edtech company. Several prominent investors have called for the EGM to address persistent concerns within BYJU’S.
An extraordinary general meeting (EGM) convened by certain prominent investors of BYJU’S is currently underway, despite the absence of participation from the family trio—Founder and CEO Byju Raveendran, Co-founder Divya Gokulnath, and his brother Riju Ravindran.
A wide range of topics, including leadership changes and allegations of financial mismanagement, are being discussed at the meeting.
The current board at BYJU’S includes Raveendran, Gokulnath, and Ravindran, following the official departure of Peak XV Partners’ GV Ravishankar, Prosus’s Russell Dreisenstock, and Chan Zuckerberg’s Vivian Wu from the edtech firm's board in June of last year.
The EGM is an important step in a sequence of events involving the troubled edtech company, and several of its prominent investors have called for the EGM to address persistent concerns within BYJU’S.
The meeting has been convened by investors including General Atlantic, Chan Zuckerberg Initiative, MIH EdTech Investments, Own Ventures, Peak XV Partners, SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, Sofina, and T Rowe Price Associates.
It’s important to note that on February 21, the Karnataka High Court issued an interim order stipulating that decisions taken by BYJU’S shareholders during the EGM on February 23 will not be implemented until the next hearing scheduled for March 13, 2024.
Here’s an overview of the resolutions slated for approval at the EGM, according to the EGM notice, seen by YourStory.
The investors aim to revamp the board structure to ensure fair shareholder representation and incorporate approved independent input. This will help enhance corporate governance and address any non-compliance issues with existing agreements.
The group of investors propose a new board structure comprising nine members: one founder, two executives from group companies, three shareholders, and three independent directors. These appointments will be decided at a shareholder meeting within 30 days of this EGM.
BYJU’S' investors intend to appoint a forensic expert within 30 days of this EGM. The expert will investigate various activities, such as acquisitions, alleged breaches, regulatory affairs, tax filings, and any company payments, as well as document any recommended improvements.
The investors aim to promptly alter the company’s management to protect shareholder value. This includes removing Raveendran as CEO, along with Gokulnath and Ravindran from their management positions and director roles.
BYJU’S' investors intend to appoint an interim chief executive officer and engage a search firm to find suitable candidates with relevant experience. Further management adjustments will be evaluated based on the business’s needs and the performance of the founders and the current executive team.
The investors seek to prohibit any founder of the company from making any transfers, direct or indirect, of shares, rights, or interests in subsidiaries or associate companies, including Aakash, without the approval of shareholders.
The request for the EGM on February 23 follows earlier notices of requisition sent to the board of directors of Think and Learn Private Limited in July and December 2023, which were disregarded by the company, according to a statement from the group of investors, earlier this month.
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.
Edited by Megha Reddy
