Byju Raveendran and His Family Declare It “Procedurally Invalid” and Will Not Attend Today’s EGM

The parent company of Byju’s, Think & Learn Pvt Ltd, said on Thursday that Byju Raveendran, the founder and CEO, and several board members will not be present at the extraordinary general meeting (EGM) on Friday that a group of shareholders had called to remove Raveendran and his family.

“This EGM is legally in violation of the Companies Act of 2013, procedurally invalid, and contractually in violation of our AOA and SHA.” A spokesman for Byju said that neither Byju Raveendran nor any other board member will be present at this illegitimate EGM.

As a result, if the EGM is still called, it will not have the necessary quorum and will not be able to debate or vote on the agenda. In particular, the EGM cannot start under Clause 39(a) of the AOA and Clause 4.8(a) of the SHA if there is not a quorum within 30 minutes of the specified time (i.e., by 930am IST), he said.

Together, Raveendran, his brother Riju Ravindran, and wife Divya Gokulnath, who is also a co-founder of the business, own 26% of the shares. As of June 2022, investors aiming for their removal had more than 30% of the company’s shares.

The Karnataka High Court received a plea from Byju’s asking for an injunction to prevent the shareholders from convening the EGM.

Investors were permitted to proceed with the EGM even though the court said that the final hearing on March 13 will determine whether or not the voted resolutions were implemented.

Investors will vote on a number of items during the EGM, which starts minutes after this article is published, including the removal of the founder, restrictions on share transfers, and modifications to the shareholder agreement.

This meeting takes place concurrently with the full subscription of Byju’s rights offering, which aims to raise $200 million at a 99 percent value cut. If the “dissenting investors” wait until February 29 to participate in the offer, their stakes will be drastically reduced.

“EGM is valid and fully in accordance with applicable law and EGM will continue as per plan,” according to investment sources, notwithstanding this. They clarified that the statement that the EGM won’t have a quorum if founders aren’t present is untrue.

According to Byju’s, these stockholders are not eligible to vote. In a previous statement, the business said, “We would emphasise that the shareholder’s agreement does not give them the right to vote on CEO or management change.”

Investors Chan Zuckerberg Initiative, Owl Ventures, Peak XV Partners (formerly Sequoia Capital India & SEA), Sands Capital Global Innovation Fund, Sofina, T Rowe Price Associates, and General Atlantic are among those that are disapproving of the company’s management.