Byju's: Battle for control

 Raveendran and his family dismissed last week’s EGM as “procedurally invalid,” citing the absence of any founder.
Raveendran and his family dismissed last week’s EGM as “procedurally invalid,” citing the absence of any founder.

Summary

  • Investors called an extraordinary general meeting to oust founder CEO Byju Raveendran and edtech firm’s board, but it hasn’t happened. The EGM’s validity was taken to court.

A mirage of calm at Byju’s vanished on Friday, with a battle for the edtech firm’s control out in the open between significant investors and its founder. Rebellious investors called an extraordinary general meeting (EGM) where 60% of shareholders reportedly voted out founder and chief executive officer Byju Raveendran along with the board. 

Dutch investment firm Prosus NV, which was among the investors that called the EGM, claimed that shareholders passed resolutions aimed at resolving “outstanding governance, financial mismanagement and compliance issues" at the company, reconstituting the board of Think and Learn, the parent of Byju’s, so that its founder no longer controls it, and also changing operational leadership. Raveendran and his family dismissed last week’s EGM as “procedurally invalid," citing the absence of any founder. 

To his relief, the Karnataka high court had already stayed the meeting’s decisions from being implemented until it heard the founder’s plea on 13 March. An interesting case study of Indian startup shareholder activism is in the making. As precedents may get set, this power struggle needs to be followed closely.

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