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As many as six shareholders of Byju’s parent company Think and Learn Private Limited have moved a resolution to oust the founders from control of the edtech company amid the financial crisis, PTI reported citing sources.
In an extraordinary general meeting, Byju’s investors urged consideration of ousting all founders from decision-making positions, including co-founder and CEO Byju Raveendran, sources familiar with the matter told the agency.
Investors led by Dutch investment firm Prosus at the EGM call called for the resolution of outstanding governance, financial mismanagement and compliance issues and the reconstitution of the Board of Directors.
“The resolutions being presented for consideration by the EGM include a request for the resolution of outstanding governance, financial mismanagement and compliance issues, the reconstitution of the Board of Directors so that it is no longer controlled by T&L’s founders and a change in the leadership of the Company”, reads the communication sent to shareholders by the group of investors.
The notice to remove the founders of the educational technology company has been supported by General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl and Sands. These shareholders together hold around 30 per cent of Byju’s shares.
Shareholders pushed for co-founder and CEO Byju Raveendran to be removed from his position as soon as possible, Mint reported citing sources. “The notice was sent after the company failed to act on an EGM application notice sent first in July and then in December,” a source said.
Byju’s financial crisis intensifies
Edtech platform Byju’s had reached its peak valuation of $22 billion in March 2022, when demand for online education was high due to the pandemic. However, the company was unable to meet its obligations and pressure from lenders increased.
Byju’s lenders filed an insolvency petition last week after the startup defaulted on a $1.2 billion loan. The company is seeking $200 million by selling new shares to shareholders, it said Monday. Such a measure would reduce its value by more than 90%.
Investors are now looking for a board reshuffle and an immediate change in the company’s top management, as the situation continues to look bleak for founder Byju Raveendran.
BYJU recently declared its financial results after a delay of approximately 22 months in which it reported a widening of operating losses to $6,679 crore in FY22, mainly due to losses incurred by subsidiaries White Hat Jr and Osmo.
(With contributions from agencies)