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A group of shareholders owning more than 30 per cent of Byju's has sent a notice to the cash-strapped edtech firm calling for an extraordinary general meeting (EGM) to address 'persistent issues', including a change in management, reported The Economic Times (ET).
These shareholders will vote to oust founder and CEO Byju Raveendran and the existing board from the edtech startup's operations.
The current board of Bjyu's parent 'Think & Learn' comprises Raveendran, his wife and cofounder of Byju’s Divya Gokulnath, and his brother Riju Ravindran.
While investors had urged Raveendran to step down from an operational role, this is the first time shareholders have banded together to issue a statement calling for a change in leadership at the company.
“The issuance of this EGM notice follows many months of continued efforts by shareholders to engage with the company to address persistent issues relating to corporate governance, mismanagement, and compliance. These efforts have been ongoing following the resignation from the board in June 2023 of directors nominated by Prosus and other shareholders,” the investor group said in a statement.
While the investor group was grateful for the independent advisory council's efforts to address some of Think & Learn's looming challenges, it was also "deeply concerned about the future stability of the company under its current leadership and with the current constitution of the Board," the statement added.
Former SBI chairman Rajnish Kumar and ex-Infosys CFO Mohandas Pai are members of Byju's board advisory council. They joined the council in July following the resignation of investors Prosus, Peak XV Partners (previously Sequoia Capital India), and Chan Zuckerberg Initiative.
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On January 29, Byju's notified investors of a rights offering, which is expected to be priced at a 99 per cent discount to the company's previous peak valuation of $22 billion in 2021. If the issuance is successful, the firm's post-money valuation will be $225 million.
Sources also told ET that certain investors were also concerned about being informed about the rights issue at the last minute, especially given the sharp drop in valuation. Reports suggest that a rights issue at such a low price will result in a cap table reset if any investor does not subscribe to the share sale.
