A group of investors at Byju’s on Friday voted to oust Byju Raveendran and his family members from the board of the ed-tech start-up, once the sparkle of India’s unicorns with a valuation of $22 billion.
The outcome of the vote at the EGM will not be effective until March 13, when the Karnataka High Court will hear Raveendran’s plea opposing the EGM.
Byju’s said the resolutions passed at the EGM were invalid and ineffective. “The passing of the unenforceable resolutions challenges the rule of law at worst’’, its spokesperson said.
Shareholders who voted against Raveendran hold more than 60 per cent of the company, including Dutch investment firm Prosus, General Atlantic and Peak XV Partners.
“At today’s EGM shareholders unanimously passed all resolutions for vote. These included a request for the resolution of the outstanding governance, financial mismanagement and compliance issues at Byju’s; the reconstitution of the Board of Directors, so that it is no longer controlled by the founders of Think & Learn (T&L); and a change in leadership of the company,’’ Prosus said in a statement.
“As shareholders and significant investors, we are confident in our position on the validity of the EGM meeting and its decisive outcome, which we will now present to the Karnataka High Court in line with due process,’’ it said.
Apart from Raveendran, the other family members in Byju’s are his wife Divya Gokulnath and brother Riju Raveendran.
The virtual was reportedly disrupted by around 200 Byju’s employees who wanted to join the proceedings.
Sources said that investors were only allowed to join the meeting after due verification and that around 40 people representing the investors were permitted to vote on
the resolution.
Raveendran and the other family members did not attend the meeting calling it “procedurally invalid’’. The start-up has maintained that as per its Articles of Association (AoA), at least one founder-director is required to form a valid quorum. Since the founders had not participated in the meeting, the quorum was not established.
“These resolutions were voted upon without the valid constitution of a quorum, as stipulated in Byju’s AoA. According to Articles 38 and 39(a) of the AoA, at least one founder-director is required to form a valid quorum. As the founders did not participate in the meeting, the quorum was never legitimately established, rendering the resolutions null and void,” it said.
Byju’s claimed that only around 20 per cent of the number of shareholders attended the “farcical EGM”. It, however, referred to the number of shareholders and not the shareholding the investors held in the company.
The EGM is another headache to Raveendran as a group of four investors have filed an oppression and mismanagement suit against the management in the Bangalore bench of the NCLT.
They included General Atlantic, Prosus, Sofina, and Peak XV along with support from other shareholders, including Tiger and Owl Ventures. It has sought that the founders, including Raveendran, be declared unfit to run the company.
