Byju Raveendran, his wife Divya Gokulnath, and his brother Riju Raveendran will not attend the extraordinary general meeting scheduled to be held on Friday through video conferencing or other audio-visual means. Since the board comprises these three members only, it means that the company’s board will not be present during the EGM, which has been called by a group of investors seeking change in the company’s leadership, including the board.
This also means that the EGM will be adjourned because of lack of quorum. Byju’s articles of association mandate the presence of its promoter-director at the EGM and if the person doesn’t turn up at the meeting, the EGM can be adjourned for a week.
According to rules, two members should be present at the EGM to form the quorum for the meet. At the adjourned EGM, even if the promoter-director is not there, the shareholders present at the meeting can form the quorum.
To oust the board, the majority –50% plus one share – of votes cast should be in favour of the resolution. Raveendran and his family are the largest shareholder with a 26% stake in Byju’s.
The group of investors, who have given notice for the EGM, together own over 25%, but won’t participate in the meeting as they do not have voting rights. This is because they had signed a shareholder agreement that does not give them voting rights. Other shareholders own over 45% in Byju’s.
“This EGM is procedurally invalid, contractually in contravention of our AoA and shareholding agreement, legally on the wrong side of the Companies Act, 2013. Byju Raveendran or any other board member will not attend this invalid EGM. This means the EGM, if it is still summoned, will not have the required quorum and cannot proceed to discuss or vote on the agenda. As custodians of Byju’s, it is the responsibility of the founders to respect the established procedures of law and protect the company’s integrity,” Byju’s said in a statement on Thursday.
Meanwhile, the Enforcement Directorate has upgraded its look out circular (LC) issued against Raveendran in connection with a Fema probe, seeking to stop him for going abroad. The earlier such alert meant that immigration authorities had to just intimate the agency about his movements through various ports. However, Raveendran is currently in Dubai and not in India.
On Wednesday, Byju’s got an interim relief by the Karnataka high court, which ruled that any resolution proposed to be passed at the company’s EGM on Friday will not be valid till the edtech firm’s petition is fully heard and disposed of by the court. The court will next hear the company’s petition on March 13.