Edtech platform BYJU’s parent firm Think and Learn Private Limited has said that neither the company’s founder and chief executive Raveendran nor any other board member will attend the extraordinary general meeting (EGM) called by some select investors, PTI reported on Thursday.
The company’s shareholders on Friday will vote on a resolution brought by some investors to oust Raveendran and his family over allegations of mismanagement.
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A BYJU’s spokesperson called the EGM ‘procedurally invalid’ and contractually in contravention of the firm’s article of association and shareholder’s agreement.
“Byju Raveendran or any other Board member will not attend this invalid EGM. This means the EGM, if it is still summoned, will not have the required quorum and cannot proceed to discuss or vote on the agenda. As custodians of BYJU’S, it is the responsibility of the founders to respect the established procedures of law and protect the company’s integrity,” a spokesperson of the company said.
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The founders and board members jointly hold around 22 per cent stake in the company. The EGM notice has been backed by General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, who collectively account for about 30 per cent stake in Byju’s.
However, sources from BYJU’s said,” The EGM is valid and fully in accordance with applicable law. It will continue to be held as per plan. Incorrect to say that EGM won’t have quorum if founders don’t attend”.
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The outcome of the vote at EGM will not be applicable till March 13 when the Karnataka high court will hear the company founder’s plea challenging the move by certain investors.
Karnataka HC refused to stay BYJU’s EGM
On Wednesday, the court had refused to stay the EGM of the company, whose valuation sank from $22 billion in 2022 to $200 million. The company had reached its peak during the Covid-19 pandemic when lockdown measures led to students getting education at their homes.
However, the reopening after the pandemic saw students who earlier opted for online learning, going back to physical classes. The recent acquisition of Aakash put Byju’s under financial strain.
In the last one year, BYJU’s suffered one setback after the other, including its auditor resigning, lenders beginning bankruptcy proceedings against a holding company and a US lawsuit disputing the terms and repayment of a loan.
(With PTI inputs)