Byju's shareholders vote to oust CEO in meeting termed 'illegal' by edtech firm
Over 60 per cent of shareholders voted for removal of founder CEO Byju Raveendran and his family over alleged “mismanagement and failures”.
In Short
- Over 60% Byju's shareholders vote for removal of CEO Byju Raveendran
- Raveendran, family stay away from the meeting, call it “procedurally invalid”
- Meeting's vote won't be applicable till court's ruling on March 13
Over 60 per cent of the shareholders of ed-tech firm Byju's cast their votes in favour of ousting founder CEO Byju Raveendran and his family from their positions, citing concerns over "mismanagement and failures" within what was previously regarded as one of India's most promising tech startups.
The company has contested the legitimacy of the vote, which occurred in the absence of its founders, labelling it as "invalid".
Prosus, a major investor among the six who initiated the call for the extraordinary general meeting (EGM), released a statement affirming that “shareholders unanimously passed all resolutions put forward 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 founder of T&L; and a change of leadership of the company.”
Raveendran and his family chose not to attend the EGM, dismissing it as "procedurally invalid."
Nonetheless, the decisions made during the EGM will remain on hold until March 13, awaiting the verdict of the Karnataka High Court on Raveendran's petition against the investor's decision to convene the EGM.
The court, on Wednesday, declined to halt the EGM, which was called upon by shareholders holding an aggregate stake of more than 32% in Think & Learn (T&L) – the parent entity of Byju's. However, it ruled that any resolutions passed would be suspended until the next hearing.
Owning a 26.3 per cent stake in the company, Raveendran and his family are significant shareholders.
In anticipation of the EGM's outcome, Byju's issued a preemptive statement, asserting that "the resolutions ratified during the recently held EGM — which saw participation from a select group of shareholders — stand as invalid and non-binding. The company strongly believes that the enactment of these unenforceable resolutions represents, at best, a challenge to the rule of law."