Byju Raveendran, the founder of edtech giant Byju’s, finds himself embroiled in a corporate battle after a shareholder group voted to remove him as CEO. Despite the vote, Raveendran maintains in a letter to employees that he remains the company’s leader and argues that the shareholders’ actions were invalid.
The shareholder group, which includes major investors Prosus Ventures and Peak XV Ventures, claims to have voted unanimously on Friday to address concerns surrounding governance, compliance, and financial management. Their resolutions also aimed to reconstitute the board and remove the founders, including Raveendran, from controlling the company.
However, Raveendran disputes the validity of the shareholder vote, citing two key points. He asserts that the emergency general meeting (EGM) lacked the necessary quorum, meaning a minimum number of shareholders were not present to make the vote binding. Additionally, he claims that the vote itself did not garner majority support for the proposed resolutions.
Raveendran further alleges that only 35 out of 170 shareholders, representing approximately 45% ownership, attended the EGM. He argues that this lack of participation and alleged procedural noncompliance render the meeting’s decisions invalid.
“Regardless of the relentless trial by the media,” Raveendran wrote to employees, “I firmly believe that the truth will inevitably prevail.”
The controversy unfolds amidst Byju’s struggles with securing new funding. The cash-strapped startup, once valued at a staggering $22 billion, recently launched a rights issue aiming to raise $200 million. This move effectively resets the company’s valuation to a significantly lower $25 million.
Despite the challenges, Raveendran claims the rights issue has received a positive response, indicating a potential upswing for the company. He asserts, “Our comeback is now inevitable.”
While Raveendran maintains his position as CEO, the shareholder vote highlights significant tensions within Byju’s leadership. The company faces the dual challenge of navigating a legal battle and securing its financial future, with the outcome impacting the future of the once-dominant edtech leader.