Defiant Raveendran says EGM a farce; ‘biz as usual’

A day after a group of investors voted to oust him as the CEO of Byju’s, founder Byju Raveendran wrote a letter to the employees of the edtech firm, emphasising that he continues to remain in office and there are no changes at the company. On Friday, at the company’s extraordinary general meeting, investors had also voted to oust his family from the board of Byju’s, which other than Raveendran, includes his wife Divya Gokulnath and his brother Riju Raveendran.

“The claims made by a small group of select minority shareholders that they have unanimously passed the resolution in the EGM is completely wrong. Only 35 of 170 shareholders (representing around 45% of shareholding) voted in favour of the resolution. That in itself shows the very limited support that this irrelevant meeting received,” Raveendran wrote to employees. “Just as you can’t change the rules of a game midway without agreement from all players, we can’t alter how our company is run without following these strict guidelines,” he added.

“At Friday’s EGM, a lot of these essential rules were violated. This means that whatever was decided in that meeting does not count, because it didn’t stick to the established rules,” he added.

Raveendran also referred to the Karnataka High Court’s order and said any decisions made during the meeting would not be given effect until next hearing on March 13.

“I am writing this letter to you as the CEO of our company. Contrary to what you may have read in the media, I continue to remain CEO, the management remains unchanged, and the board remains the same. Put differently, it is ‘business as usual’ at Byju’s,” Raveendran said.

He said he firmly believes that the truth will inevitably prevail, despite the “relentless trial by the media”. “To reemphasise, the rumours of my firing have been greatly exaggerated and highly inaccurate,” Raveendran said.

Outlining what he claimed were key discrepancies at the EGM, he said the meeting was convened without following the proper procedure set out by the law and the company’s Articles of Association.

“To pass any resolution the meeting needs to have a proper quorum, a set of people who are mandatory. Our articles are clear on the quorum requiring the presence of at least one founder-director. Consequently, any resolutions taken at the meeting are not enforceable as per law,” he said.

Prosus—one of the six investors who had called the EGM—in a statement on Friday, said, “shareholders unanimously passed all resolutions put forward for vote”.

Investor sources said shareholders who voted and passed the resolutions hold about 60% stake in Byju’s, whereas the founder and his family hold around 26%.

Four investors have also filed an oppression and mismanagement suit against the management of the company in the Bengaluru bench of the National Company Law Tribunal to declare founders as unfit to run the company, appoint a new board, declare the rights issue as void, conduct a forensic audit, among other reliefs.

The concerns raised in the NCLT suit include financial mismanagement by the founders leading to losing control of Aakash, Byju’s Alpha (term loan B) default, prolonged corporate governance issues including non-hiring of CFO and independent director, oppressive nature of the $200 million rights offer, regulatory non-compliances, oppressive opacity and wilful default in sharing information with stakeholders.

The petition has been signed by four investors—Prosus, GA, Sofina, and Peak XV along with support from other shareholders including Tiger, Owl Ventures.

According to sources, the plea also seeks declaration of the just-concluded $200-million rights offer as void and sought a direction that the company should not take any corporate actions that will prejudice the rights of the investors.