Edtech company Byju’s CEO and founder Byju Raveendran got major relief during a Karnataka high court hearing, where the bench refused to stay the emergency meeting called by the investors. The bench said that all the resolutions passed during the upcoming shareholders meeting will be deemed invalid.
Byju’s on Wednesday said that any calls taken by the investors during the emergency meeting (EGM) will not be considered valid till the time the court is done with hearing their petition.
This means that the investors’ attempt to vote out the company founders from the board of directors will not be held valid, protecting Byju Raveendran in his post as CEO. The investors have also lost the right to vote for removing Divya Gokulnath and Riju Raveendran from the board of directors.
The edtech company has suffered a string of setbacks since early 2023, including its auditor resigning, lenders beginning bankruptcy proceedings against a Byju’s holding company and a U.S. lawsuit disputing the terms and repayment of a loan.
Byju’s said certain investors, including General Atlantic, Peak XV – formerly known as Sequoia Capital India – and Chan Zuckerberg Initiative had violated their shareholders’ agreement by calling for an extraordinary general meeting on February 23.
During the hearing of their petition, Byju’s told the Karnataka court that the investors were attempting to disrupt their operations by preventing the urgently needed funding for the company.
In a statement, Byju’s said, “The Karnataka high court, in response to a petition by Think & Learn Pvt Ltd (the parent company of BYJU’S), has passed an order stating that any resolutions proposed to be passed in the 23rd February EGM called by select investors as invalid until the final hearing and disposition of this petition.”
Investors against CEO Raveendran
Byju’s investors had earlier moved a resolution to conduct a vote seeking the ouster of the founders from the board of directors, including CEO Byju Raveendran, his wife Divya Gokulnath and brother Riju Raveendran.
The shareholders of the company believe that there is a lack of transparency and financial mismanagement under the current CEO, and have said that they will continue to hold their EGM, despite the decision of the Karnataka court.
Investor’s sources said it is incorrect to say the court has invalidated the resolutions. The source said the EGM will go ahead with a vote to remove Byju as the CEO.
(With inputs from Reuters, PTI)