Byju's 'regularly disregarded' advice on key matters, says Prosus

Dutch-listed firm breaks silence on its director's exit, says he was unable to fulfil his fiduciary duty

Lifting the veil on what prompted the resignation of its director from Byju’s board last month, Prosus, one of the earliest and largest investors in the edtech company, said on Tuesday that the Indian firm’s executive leadership “regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters” despite his repeated efforts.

“The decision for our director to step down from the Byju’s board was taken after it became clear that he was unable to fulfil his fiduciary duty to serve the long-term interests of the company and its stakeholders,” the Netherlands-based investment firm said in a statement.

 

Prosus said Byju’s reporting and governance structures “did not evolve sufficiently for a company of that scale”.

Russell Dreisenstock of Prosus stepped down from Byju’s board in June, along with G V Shankar of Peak XV Partners, and Vivian Wu of Chan Zuckerberg Initiative, amid questions over the company’s financial position and corporate governance practices.

Prosus had first invested in Byju’s in 2018. Recently, it slashed the valuation of Byju’s to $5.1 billion, a fall of more than 75 per cent from the start-up’s $22 billion valuation last year. Prosus also cut the valuation of its 9.6 per cent stake in Byju’s to around $493 million in the financial year ended March 31.

Prosus' statement also brings to the fore the significance of Byju’s in the Indian start-up ecosystem. “Byju’s sits at the intersection of India and education, two very important and strategic areas of investment for Prosus. Although we no longer have a representative serving on the board of the company, we continue to believe in the potential of Byju’s and its role in revolutionising access to quality education in India and around the world,” it said, adding, “Prosus will continue to assert its rights, collaborating with other shareholders and government authorities to safeguard the long-term interests of the company and its stakeholders.”

Prosus has invested upwards of $5 billion in India across sectors.

Responding to the statement from Prosus, a Byju’s spokesperson said in an email: “We have noted the observations of our valued investors. We have updated our shareholders about definitive steps taken to improve corporate governance and financial reporting.”