Discover the latest twists in the Byju’s saga! A court ruling throws the education firm’s shareholder meeting into chaos. Get the inside scoop on the legal drama unfolding, as investors clash over vital resolutions. Don’t miss out on the high-stakes battle shaking up the world of education and finance!
Byju’s EGM Resolutions Declared Invalid
Indian education giant Byju’s encountered a significant setback as it announced that any resolutions passed during an upcoming shareholder meeting have been deemed invalid by a court. This ruling will remain in effect until the final hearing of the petition. The company has faced a series of challenges since early 2023, including the resignation of its auditor, the initiation of bankruptcy proceedings by lenders against Byju’s holding company, and a legal dispute in the US regarding loan terms and repayment.
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Violation of Shareholders’ Agreement
Byju’s pointed out that certain investors, such as General Atlantic, Peak XV (previously known as Sequoia Capital India), and the Chan Zuckerberg Initiative, allegedly breached the shareholders’ agreement by convening an extraordinary general meeting on February 23. The company stated that its case before the Karnataka High Court aims to prevent these investors from disrupting its operations by withholding urgently needed capital.
The ed-tech giant, led by billionaire Raveendran, had been valued at $22 billion in 2022. However, the company is now considering a rights issue worth $200 million, signaling a significant discount of 99% from its previous valuation. It is facing its fourth insolvency plea in the last 6 months.
A group of shareholders, including tech investor Prosus, had requested the meeting earlier to address concerns regarding financial mismanagement and compliance issues. Additionally, they called for the removal of Byju’s founder, and CEO, Byju Raveendran, and a board reconstitution.
Last year, members representing Peak XV, Prosus, and the Chan Zuckerberg Initiative voluntarily stepped down from the ed-tech company’s board.
Bhaarat Bulletin’s Shikha Rai, Bimal Dev, and Byju’s/Karnataka High Court have contributed to the above story
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