Shareholder agreement bars investors from voting on CEO, management changes: BYJU'S
The statement comes in response to several investors issuing a notice to Think and Learn Private Limited seeking an extraordinary general meeting to address ongoing concerns at BYJU'S.
Think and Learn Private Limited (TLPL)—the parent company of BYJU’S—asserted that the shareholder’s agreement does not grant investors the right to vote on CEO or management changes.
The statement comes in response to several investors who, a day prior, issued a notice to TLPL, seeking an extraordinary general meeting (EGM) to address ongoing concerns. Proposed resolutions for the EGM include addressing governance, financial, and compliance issues; restructuring the board to reduce founder control; and changing the company’s leadership.
TLPL stated that it would proceed with the planned $200-million rights issue buoyed by positive responses from multiple investors and expressed satisfaction with the broad support garnered from its shareholders.
“The criticality of the rights issue has been shared with all shareholders, with capital being pivotal for a successful turnaround. Unfortunately, the company and our employees are paying the price for a stand-off triggered by some investors,” it added in the statement.
Earlier on Friday, in a letter sent to the edtech firm’s employees, seen by YourStory, management team mentioned that the company has secured commitments exceeding 100% of the intended amount for the $200-million rights issue. The completion of this process is expected to take an additional 25 days, it said.
BYJU’S' parent company noted that it would continue engaging in dialogue while the founders and leadership explore avenues to address the company’s increasing obligations, including salary payouts.
Earlier on Friday, it was reported that the edtech firm has yet again failed to pay salaries to its employees for January amid a severe liquidity crunch.
In the letter to BYJU'S employees, the firm's management said that the salaries would be disbursed in phases, commencing today, and concluded by Monday. BYJU’S' management also alleged that certain investors are conspiring and demanding a change in the company’s leadership.
On Thursday, the group of investors said they are “deeply concerned about the future stability of the company under its current leadership and with the current constitution of the board."
The present board comprises BYJU'S Founder and CEO Byju Raveendran, his wife and co-founder Divya Gokulnath, and his brother Riju Ravindran.
Peak XV Partners’ GV Ravishankar, Prosus’s Russell Dreisenstock, and Chan Zuckerberg’s Vivian Wu officially stepped down from the edtech firm's Board in June last year.
BYJU’S, which rapidly grew through strategic acquisitions, continues to encounter challenges post the pandemic-led edtech boom.
Last week, the edtech firm submitted its financial results for the fiscal year (FY) 2021-22 to the Ministry of Corporate Affairs. It reported a consolidated loss of Rs 8,245 crore in FY22, up 80.6% from Rs 4,564 crore recorded in the previous fiscal year.
Edited by Kanishk Singh