Edtech giant Byju's extraordinary general meeting (EGM) on February 23 reportedly faced multiple disruptions as unidentified attendees tried to join the meeting impersonating themselves as the company’s investors. According to reports, several attendees also received an unidentified notification stating that the EGM had been cancelled. Owing to this, the verification of attendees took an hour to complete, despite the EGM starting at 9:00 am.
Notably, the company's three board members, chief executive officer and founder Byju Raveendran, co-founder and his wife Divya Gokulnath, and his brother Riju Raveendran, did not attend the EGM, calling it "procedurally invalid." The three board members hold a 26% stake in the company.
The key agendas for the EGM was to discuss issues related to the outstanding governance, financial mismanagement and restructuring of Byju's board. Some of the miffed shareholders had demanded for the ouster of Raveendran, though the company has said they (shareholders) have "no such right".
"This EGM is procedurally invalid, contractually in contravention of our AOA (Articles of Association) and SHA (Shareholders’ Agreement), legally on the wrong side of the Companies Act, 2013. Byju Raveendran or any other Board member will not attend this invalid EGM. This means the EGM, if it is still summoned, will not have the required quorum and cannot proceed to discuss or vote on the agenda," the company had said on February 22.
Earlier this month, the investors in a notice to the edtech giant, called for an EGM to address “persistent issues relating to corporate governance, mismanagement and compliance.”
Following this, the edtech giant’s board approached the Karnataka High Court earlier this week, seeking a stay on Friday’s EGM. The court has, however, refused to stay the EGM, but said that any resolution passed on Friday cannot be implemented until the next hearing.
Byju’s, which was once valued at a staggering $22 billion, has seen its valuation cut over the past two years. In January this year, U.S.-based asset manager BlackRock slashed the implied valuation of the Indian startup by 95% to $1 billion.
In November 2023, Prosus cut Byju's valuation to less than $3 billion. The tech investor holds a 9.6% stake in Byju's parent Think & Learn Pvt Ltd.
Byju's investor board members from Prosus, Peak XV, and Chan Zuckerberg Initiative stepped down last year.
Beleaguered Byju's grew rapidly on the back of an acquisition spree before troubles began. The edtech company shelled out $2.5 billion on acquisitions, including Aakash Educational Services for nearly $1 billion, U.S.-based Epic, kids' coding platform Tynker, professional education firm Great Learning and exam prep platform Toppr.
The losses of the edtech startup widened manifold to ₹8,245 crore for the financial year 2021-22, dragged down by losses in its coding unit White Hat Jr. Byju's posted a loss of ₹4,564 crore in FY21.
Byju's statutory auditor Deloitte Haskins & Sells quit last year citing a long delay in the edtech startup's financial statements for the year ended March 31, 2022. Following the auditor's resignation, Byju's appointed BDO (MSKA & Associates) as its new auditor.
In 2023, the Enforcement Directorate (ED) conducted searches at the premises of Byju’s and the residence of Byju Raveendran and seized documents pertaining to investments received and made by the company.
