Byju's investor group on Friday voted in favor of firing Byju Raveendran, founder and chief executive officer of the edtech group, in a separate, surreal moment for the once Indian startup. In order to stop the recently launched rights issue, a suppression and management lawsuit was filed against the company's management. most precious.
At an emergency general meeting that ended earlier today, a group of investors including Prosus Ventures and Peak XV Partners voted for changes in the startup's leadership. According to investor sources familiar with the matter, the participating shareholders have a combined ownership of more than 60% of Byju's shares and have also passed a resolution to reconstitute Byju's board of directors. (Two of his associates close to Byju disputed that the participating shareholders held more than 60% of his shares in the company. Neither side has issued an official statement on this figure. )
Mr. Raveendran and other board members did not attend Friday's general meeting. Byju's claimed in a statement earlier this month that shareholders do not have voting rights to enact a leadership change in the edtech group.
“At today’s EGM, shareholders unanimously passed all resolutions submitted for vote. These include: resolving BYJU’s outstanding governance, financial mismanagement and compliance issues; The shareholder group included a request to reconstitute the board of directors so that it is no longer controlled by T&L's founders. I mentioned it inside.
“As shareholders and significant investors, we are confident in our position on the validity of the EGM meeting and its conclusive outcome and will now submit it to the Karnataka High Court in line with due process.” Separately, four Byju's investors, who hold about 25% ownership in Byju's, filed a suit with the National Company Law Tribunal earlier on Friday seeking an injunction against the rights issue.
Friday's decision comes after more than a year of unrest among some of Byju's biggest investors, who feared the $22 billion Indian edtech startup would be held fast and loose with accountability. He claims to have come.
Byju's in a statement on Friday questioned the legitimacy of the resolution passed at the general meeting, saying only a “few selected shareholders” were present at the meeting and the decision was “null and of no effect”. said.
Byju's has raised more than $5 billion so far and spent more than $2.5 billion in acquisitions alone in 2021 and 2022. The 10-year-old startup had been aiming to go public in early 2022 through a SPAC deal that would value the Bengaluru-based company at about $48 billion. However, due to changing market conditions, Byju's was forced to abandon his IPO plans.
Byju's has been pursuing new funding for more than a year. The company was in the final stages of raising about $1 billion last year, but negotiations with auditor Deloitte and three key board members (heads of Prosus, Peak XV and the Chan Zuckerberg Initiative) suddenly left the startup. failed.
Instead, Byju's will raise less than $150 million in debt from Davidson Kempner and, after committing a technical default on another $1.2 billion Term Loan B, will give investors the promised amount. I had to repay the entire amount.
Late last month, Byju's launched a rights issue to raise about $200 million at a steep discount. Raveendran told shareholders earlier this week that the rights issue had been fully subscribed and asked all existing investors to participate and maintain ownership.
“We have built this company together, and I want everyone to join us in this new mission. Your initial investment laid the foundation for our journey, and this “Rights issues help preserve and build greater value for all shareholders,” he wrote in the letter. “[…] I understand that joining this rights issue may seem like Hobson's choice. However, this is the only viable option before us today to prevent the erosion of lasting value. ”