Byju’s shareholders vote to oust founder Raveendran, seek board revamp; company calls EGM invalid

“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,” said the statement. T&L is Think & Learn Pvt Ltd, the parent company of Byju’s.

The resolutions included the removal of founder Byju Raveendran as CEO, and his wife Divya Gokulnath and brother Riju Raveendran from their respective management roles and as directors.

Raveendran and his family stayed away from the EGM. Byju’s said only 20 per cent of the investors attended the meeting. It said the resolutions, passed by a “narrow” group of shareholders, are “invalid and ineffective” and “merely request” the board to “consider” them.

“As shareholders and significant investors, we are confident in our position on the validity of the EGM meeting and its decisive outcome, which we will now present to the Karnataka High Court in line with due process,” it said.

The start-up said these resolutions “do not have any binding effect whatsoever on the company or its decision-making processes”.

“These resolutions were voted upon without the valid constitution of a quorum, as stipulated in Byju’s Articles of Association (AoA),” Byju’s said. “According to Articles 38 and 39(a) of the AoA, at least one founder-director is required to form a valid quorum. As the founders did not participate in the meeting, the quorum was never legitimately established, rendering the resolutions null and void.”

The start-up also alleged that improper conduct was displayed by the organisers throughout the EGM.

“Based on media reports, it appears that the meeting was marred by technical glitches and a failure to follow established procedures. Many shareholders were not allowed to participate in the meeting, were ejected unceremoniously, and were kept waiting for more than 2 hours as the ‘roll call’ continued,” it said.

The Karnataka High Court had on Wednesday allowed the EGM to go ahead. But it also said that any decision made during the meeting would not be given effect until the next date of hearing, which is March 13. “This order, coupled with numerous procedural irregularities and deficiencies, invalidates the resolutions passed by a select, narrow group of shareholders,” Byju’s said.

The investors who sought the 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, Sofina and T. Rowe Price Associates.