Unanimous Vote Removes Founder of Byju’s as Investors Decide

The participating shareholders — whose combined ownership in Byju’s exceeded 60% — also passed the resolution to reconstitute the board of Byju’s. “At today’s Extraordinary General Meeting shareholders unanimously passed all resolutions put forward for vote. Late last month, Byju’s launched a rights issue where it sought to raise about $200 million at a massively discounted rate. Raveendran told shareholders earlier this week that the rights issue had been fully subscribed and requested all existing investors to participate and maintain their ownership. “[…] I understand that participating in this rights issue may seem like a Hobson’s choice.

A Shake-Up at Byju’s as Investors Move to Oust CEO and File Suit Against Leadership

A group of investors at Byju’s, India’s once most valuable startup, made shocking moves today in an emergency general meeting. They voted to remove founder and CEO Byju Raveendran and filed a lawsuit against the company’s leadership, all in an effort to block a recent rights issue.

“At today’s Extraordinary General Meeting, shareholders unanimously passed all resolutions put forward for vote. These included a request for the resolution of outstanding governance, financial mismanagement, and compliance issues at Byju’s; the reconstitution of the Board of Directors; and a change in leadership of the Company.”

– Statement by the shareholder group, provided by Prosus

The group of investors, which collectively holds over 60% ownership in Byju’s, is represented by major players like Prosus Ventures and Peak XV Partners. They have expressed confidence in their position and plan to present it to the Karnataka High Court.

This move comes after more than a year of unrest among some of Byju’s largest investors. They have accused the edtech startup, valued at $22 billion, of not being accountable for their financial decisions.

In a statement, Byju’s contested the legitimacy of the resolutions passed in the EGM, claiming that only a “small cohort of select shareholders” were present and their decisions were invalid and ineffective.

The last year has been a turbulent one for Byju’s as they faced struggles with securing new funding and plans to go public through a SPAC deal worth $48 billion. However, as the market landscape shifted, the startup was forced to abandon their IPO plans.

Byju’s has been chasing new funding for over a year, with talks falling through last year and a subsequent debt raise of less than $150 million from Davidson Kempner. The company also faced issues when three key board members, including representatives from Prosus and Chan Zuckerberg Initiative, suddenly quit.

In late July, Byju’s launched a rights issue, offering shares at a reduced price of $200 million. Raveendran urged all existing investors to participate and maintain their ownership, stating that this was the only viable option to prevent permanent value erosion.

In a letter to shareholders, Raveendran wrote, “We have built this company together and I want us all to participate in this renewed mission. Your initial investment laid the foundation for our journey and this rights issue will help preserve and build greater value for all shareholders.”

This story is still developing, and updates will be provided. Stay tuned for more details.