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On Friday, Byju shareholders, including Prosus NV and Peak XV Partners, voted to remove founder Byju Raveendran as chief executive officer and reconstitute the company's board due to “mismanagement.” It was reported that shareholders unanimously passed all resolutions at the Extraordinary General Meeting (EGM).
Investors seeking EGM included General Atlantic, Chan Zuckerberg Initiative, MIH Edtech Investments, Own Ventures, Peak XV Partners, SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, They included Sofina and T. Rowe Price Associates.
On Wednesday, the Karnataka High Court allowed the EGM to proceed. However, it also said that any decisions made during the meeting would not take effect until March 13, the date of the next public hearing.
Meanwhile, Byju on Friday challenged shareholders' decision to remove its founder as chief executive officer. The company claimed that the resolution at the general meeting of shareholders was “invalid” because the founder was not present.
“The resolutions passed at the recently concluded extraordinary general meeting attended by a small number of selected shareholders are null and void and of no effect,” the company said.
The statement also said that at least one founder-director must be present at a meeting to form a valid quorum, but as neither Byju Raveendran, his wife nor his brother were present, there was no quorum. was not satisfied. This makes the resolutions passed at the meeting “null and void.”
The collapse of an edtech giant
Byju was founded in 2011 by Byju Raveendran and Divya Gokulnath. The company initially focused on providing online video-based learning programs for the K-12 segment and competitive exams. By 2021, it had spent more than $2.6 billion on acquisitions.
Edtech unicorns received a major boost during the pandemic as schools and universities were closed. The company took this opportunity to strengthen its core and expand related services through a series of acquisitions. In 2022, this edtech company was valued at his $22 billion.
But things changed after educational institutions reopened after the pandemic, and for the past two years, the company seemed to be mired in one problem after another. The recent controversy involves search and seizure operations carried out by the Enforcement Directorate under the Foreign Exchange Management Act (FEMA) at three premises in Bangalore regarding money laundering. According to reports, investigations revealed that the edtech startup had received foreign direct investments of around Rs 28,000 crore from 2011 to 2023 and remitted Rs 9,754 crore to various foreign jurisdictions during the same period. It is said that it became
For the financial year ended March 31, 2021, Byju's reported a loss of Rs 4,588 crore, 19 times higher than the previous financial year. The company's evaluation also declined. As of January 2024, Byju's valuation was $200 million, significantly down from its peak of $22 billion in 2022.
