Byju Raveendran called EGM a sham, challenged the proposals. india business news
Mumbai: A day after majority of Byju’s investors voted to oust founder Byju Raveendran As CEO and the restructuring of the board includes his wife Divya Gokulnath and brother Riju Raveendran, the founder wrote a letter to employees saying that the extraordinary general meeting (EGM) was a “farce” and only 35 out of 170 shareholdersVoted in favor of the proposal, representing approximately 45% of the shareholding.
“This in itself shows the very limited support this irrelevant meeting has received. Our shareholder agreement gives the right to modify the composition of the board, the management team and the role of the CEO exclusively to the board, not to a group of shareholders. Recognizing this, these select few investors have drafted their resolution in a way that requests the board to consider a change in the current board structure rather than directly mandating it,” Raveendran told employees on Saturday evening. Said in the letter sent. TOI has reviewed a copy of the letter.
Investor sources said shareholders holding more than 60% stake in the company collectively voted in favor of the proposals. Raveendran said he would “challenge” these illegal and prejudicial actions and assured employees that he would remain CEO, management would remain unchanged and the board would remain the same.
“To put it differently, it is business as usual at BYJU’s,” he said. He said that a group of select minority shareholders intended to “spread misinformation” in the media. “Despite this unnecessary drama, the management is putting its full focus on the operations of the company… This order (Karnataka High Court’s interim order declaring the EGM resolutions ineffective till the next hearing), is accompanied by several procedural irregularities and shortcomings,” Raveendran said. “The resolutions passed by a select, narrow group of shareholders have been invalidated,” it said.
The CEO reiterated that the decisions taken at the EGM on Friday do not follow the established rules and hence do not count. “Our company’s governance is based on our articles of association and shareholders’ agreement, further strengthened by the existing company law,” said Raveendran. Sources said Byju’s is considering legal options and the company may hold a board meeting on Sunday.
Byju’s investor Prosus, which holds more than 9% stake in the company, said in a statement on Friday that shareholders unanimously passed all the resolutions put for vote. Apart from a change in leadership and restructuring of the board, investors sought resolution of outstanding governance, financial mismanagement and compliance issues at Byju’s.
The company said investors will present the results of the EGM in the Karnataka High Court. As per the EGM proposals, investors have proposed a new board structure consisting of nine members – a founder, two executives from group companies, three shareholders and three independents.
On February 21, the startup managed to get temporary relief from the Karnataka High Court, which passed an interim order stating that any decisions taken by shareholders at the EGM are not to be given “effect” until the case is heard on March 13. Needed
Separately, a group of four investors has moved the Bengaluru bench of the National Company Law Tribunal (NCLT) against the company, seeking to declare the founders “ineligible” to run the entity, citing harassment and mismanagement. Is. They want the tribunal to order the appointment of a new CEO and board and declare the $200 million rights issue void. The petition has been signed by Prosus, General Atlantic, Sofina and Peak XV Partners, along with support from other shareholders including Tiger Global and Owl Ventures.
“This in itself shows the very limited support this irrelevant meeting has received. Our shareholder agreement gives the right to modify the composition of the board, the management team and the role of the CEO exclusively to the board, not to a group of shareholders. Recognizing this, these select few investors have drafted their resolution in a way that requests the board to consider a change in the current board structure rather than directly mandating it,” Raveendran told employees on Saturday evening. Said in the letter sent. TOI has reviewed a copy of the letter.
Investor sources said shareholders holding more than 60% stake in the company collectively voted in favor of the proposals. Raveendran said he would “challenge” these illegal and prejudicial actions and assured employees that he would remain CEO, management would remain unchanged and the board would remain the same.
“To put it differently, it is business as usual at BYJU’s,” he said. He said that a group of select minority shareholders intended to “spread misinformation” in the media. “Despite this unnecessary drama, the management is putting its full focus on the operations of the company… This order (Karnataka High Court’s interim order declaring the EGM resolutions ineffective till the next hearing), is accompanied by several procedural irregularities and shortcomings,” Raveendran said. “The resolutions passed by a select, narrow group of shareholders have been invalidated,” it said.
The CEO reiterated that the decisions taken at the EGM on Friday do not follow the established rules and hence do not count. “Our company’s governance is based on our articles of association and shareholders’ agreement, further strengthened by the existing company law,” said Raveendran. Sources said Byju’s is considering legal options and the company may hold a board meeting on Sunday.
Byju’s investor Prosus, which holds more than 9% stake in the company, said in a statement on Friday that shareholders unanimously passed all the resolutions put for vote. Apart from a change in leadership and restructuring of the board, investors sought resolution of outstanding governance, financial mismanagement and compliance issues at Byju’s.
The company said investors will present the results of the EGM in the Karnataka High Court. As per the EGM proposals, investors have proposed a new board structure consisting of nine members – a founder, two executives from group companies, three shareholders and three independents.
On February 21, the startup managed to get temporary relief from the Karnataka High Court, which passed an interim order stating that any decisions taken by shareholders at the EGM are not to be given “effect” until the case is heard on March 13. Needed
Separately, a group of four investors has moved the Bengaluru bench of the National Company Law Tribunal (NCLT) against the company, seeking to declare the founders “ineligible” to run the entity, citing harassment and mismanagement. Is. They want the tribunal to order the appointment of a new CEO and board and declare the $200 million rights issue void. The petition has been signed by Prosus, General Atlantic, Sofina and Peak XV Partners, along with support from other shareholders including Tiger Global and Owl Ventures.
