Investors in Byju’s crisis demand founders’ removal, CEO’s dismissal
Byju’s shareholders have proposed a resolution for the removal of the company’s founders, including CEO Byju Raveendran.
According to sources cited by PTI, six shareholders of Byju’s parent company, Think and Learn Private Limited, have initiated a resolution to remove the founders’ control over the ed-tech firm amid its financial crisis.
During an extraordinary general meeting, Byju’s investors proposed removing all founders, including co-founder and CEO Byju Raveendran, from decision-making roles, according to sources familiar with the matter informed the agency.
In the notice for the extraordinary general meeting (EGM), investors led by Dutch investment firm Prosus have urged for the resolution of governance, financial mismanagement, and compliance issues, as well as the restructuring of the Board of Directors.
“The resolutions proposed for the EGM include addressing outstanding governance, financial mismanagement, and compliance issues, restructuring the Board of Directors to eliminate founder control, and implementing a change in company leadership,” stated the notice sent to shareholders by the investor group.
Backed by General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, the notice to remove the founders of the ed-tech firm has garnered support. Collectively, these shareholders hold approximately 30 percent ownership in Byju’s.
According to sources cited by Mint, shareholders are urging for the prompt removal of co-founder and CEO Byju Raveendran from his position. “The notice was issued following the company’s failure to address an EGM requisition notice initially sent in July and then again in December,” a source explained.
Byju’s financial crisis intensifies
Byju’s, the ed-tech platform, attained its highest valuation of $22 billion in March 2022, amid heightened demand for online education during the pandemic. Nonetheless, the company struggled to manage its debts, facing mounting pressure from creditors.
Last week, lenders to Byju’s initiated insolvency proceedings after the startup defaulted on a $1.2 billion loan payment. The company announced on Monday its intention to raise $200 million through the sale of new shares to shareholders, a move that would drastically reduce its value by over 90%.
In response to the deteriorating situation, investors are advocating for a board reshuffle and immediate leadership change at Byju’s, particularly concerning founder Byju Raveendran.
Byju’s recently released its financial results after a delay of approximately 22 months, revealing an increased operational loss of ₹6,679 crore in FY22, primarily attributed to losses from subsidiaries White Hat Jr and Osmo.
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