Byju’s, India’s leading edtech firm, has refuted the claims of some investors who seek to remove founder and CEO Byju Raveendran from his position. The company said that its shareholder agreement does not give them the right to vote on CEO or management change.
Investors demand EGM to oust Raveendran
A group of investors, including Prosus, General Atlantic, Peak XV and Chan Zuckerberg Initiative, issued a notice on Thursday for convening an extraordinary general meeting (EGM) to pass resolutions for the resolution of the “outstanding governance, financial mismanagement and compliance issues; the reconstitution of the Board of Directors, so that it is no longer controlled by the founders of T&L; and a change in leadership of the Company.”
This is the third time that the investors have sought an EGM, after their previous attempts were rejected by the company. The investors have accused Raveendran of mismanaging the company’s finances, violating regulatory norms and engaging in unethical practices.
Byju’s defends rights issue and leadership
Byju’s, on the other hand, has defended its proposed $200 million rights issue, which it said was essential for its survival and turnaround. The company said that it has received “encouraging responses from multiple investors” for the rights issue, and blamed some investors for “seeing the crisis as an opportunity to conspire” and demand the removal of Raveendran.
The company also said that Raveendran and his leadership team have kept the company afloat after three investors left the board last year, triggering a broader crisis. The company said that it is facing an “artificially induced crisis” by select investors, which has also caused a “slight delay” in making the January payroll.
Byju’s faces unprecedented challenges
Byju’s, once India’s most valuable startup with a valuation of $22 billion, has been facing unprecedented challenges in recent months. The company has been under scrutiny by various regulators for its acquisitions of Aakash Educational Services and Great Learning, which have been alleged to be in violation of foreign exchange and competition laws.
The company has also faced backlash from customers, employees and partners for its aggressive sales tactics, poor quality of service and breach of contracts. The company has also seen a decline in its revenue and user growth, as the pandemic-induced boom in online education has faded.
Byju’s has said that it is working to resolve all the issues and restore its reputation as a leader in the edtech space. The company has also said that it is committed to delivering high-quality education to millions of students across India and the world.