All eyes are on Byju’s extraordinary general meeting today called by a select few investors to demand the ouster of founder CEO Byju Raveendran and his family over alleged mismanagement and failures.
Raveendran said he or any other board member would not attend the meeting, calling it “procedurally invalid” and a violation of the company’s articles of association and shareholder’s agreement.
“It is with firm resolve that I inform you that neither I nor any other Board member will attend this invalid EGM. Under the AOA and the SHA, the attendance of at least one of the Founders is necessary to form the quorum for a valid EGM. ,” he wrote in a letter to shareholders
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Investors who called the meeting said it was legal and fully in line with applicable law. “The EGM will continue as planned. It would be wrong to say that the quorum at the EGM will not be complete if the founders do not attend,” he said.
Byju has obtained a stay from the High Court which stays the implementation of any resolution passed during the EGM till the next hearing.
But the court refused to stop the emergency shareholder meeting from going ahead. The case pertains to the acquisition of the company in 2021 for $950 million, of which about 70% was paid in cash and the balance was to be adjusted against Think & Learn equity.
Byju’s management has been accused of hiding important information from investors, indicating infighting.
The company and some of its key stakeholders.
They have been accused of failing to disclose material discrepancies between trading financial statements and guidance and actual results, as well as misdisclosure of available capital, leading to misrepresentation of short-term capital adequacy.
Investors have also sought information about the investigation conducted by the Enforcement Directorate (ED), MCA and Serious Fraud Investigation Office (SFIO).
They also allege that management repeatedly breached obligations listed in the shareholding agreement and articles of association and failed to provide required financial data, cap tables, M&A transaction details, loan negotiations and other information.
Next steps proposed by shareholders include evaluating the CEO and CFO positions across all entities, establishing an interim succession plan and potentially appointing a third-party interim CEO for all entities