A significant majority, comprising over 60 percent, of the shareholders of the educational technology enterprise Byju exercised their voting rights to advocate for the removal of founder CEO Byju Raveendran and his family from their executive roles. The grounds for this motion were ostensibly rooted in concerns surrounding purported "mismanagement and failures" within the framework of what had hitherto been perceived as one of India's most promising technological startups.
The veracity of the vote has been called into question by the company, which contends that the absence of its founders renders the decision "invalid" in procedural terms.
Prosus, one of the principal investors among the consortium of six entities that instigated the convening of the extraordinary general meeting (EGM), issued a statement affirming that "shareholders unanimously passed all resolutions put forward for a 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.”
Opting to refrain from attending the EGM, Raveendran and his family dismissed the proceedings as "procedurally invalid."
Notwithstanding, the decisions stemming from the EGM will be subject to a temporary suspension until March 13, pending the adjudication of Raveendran's petition by the Karnataka High Court against the investors' initiative to convene the meeting.
On Wednesday, the court declined to forestall the EGM, orchestrated by shareholders collectively wielding more than a 32% stake 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.
Commanding a substantial stake of 26.3 percent in the enterprise, Raveendran and his family wield significant influence as shareholders.
Anticipating the outcome of the EGM, Byju preemptively issued a 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."
