Byju's Dilemma: Shareholders Vote to Oust Raveendran Meanwhile, Byju contested the decision and said the resolutions taken at the shareholders' meeting were invalid since its founders were absent.
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On Friday, Byju's shareholders, including Prosus NV and Peak XV Partners, voted to oust its founder Byju Raveendran as chief executive officer, and reconstitute its board of directors over "mismanagement". It was reported that shareholders unanimously passed all resolutions at an extraordinary general meeting (EGM). The investors who sought the meeting included General Atlantic, Chan Zuckerberg Initiative, MIH EdTech Investments, Own Ventures, Peak XV Partners, SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, Sofina and T. Rowe Price Associates
However, Byju contested the decision of its shareholders , and said the resolutions taken at the shareholders' meeting were "invalid" since its founders were not present. "The resolutions passed during the recently concluded extraordinary general meeting - attended by a small cohort of select shareholders - are invalid and ineffective," company said.
The statement also said, at least one founder-director must attend the meeting to form a valid quorum, but it was not met since neither Byju Raveendran, his wife nor his brother were present. This renders the resolutions taken at the meeting as "null and void".
The downfall of the Ed-tech giant
Byju was launched in 2011 by Byju Raveendran and Divya Gokulnath. During the initial days, the company focused on offering online video-based learning programs for the K-12 segment and for competitive exams. Till 2021, it spent over $2.6 billion on acquisitions.
During the pandemic, the edtech unicorn got a massive boost due to the shutting down of schools and colleges. It took it as an opportunity to strengthen its core and expand to allied services with an array of buyouts. In 2022, the ed-tech firm was valued at $22 billion.
However, post the pandemic, when the educational institutions reopened, things turned topsy turvy, and the company ran into one problem after another.
It was also mired in controversies relating to the search and seizure operations conducted at three premises in Bengaluru by the Enforcement Directorate under Foreign Exchange Management Act (FEMA) with regards to money laundering. The searches reportedly revealed that the edtech startup had received foreign direct investment of around INR 28,000 crore between 2011 and 2023 and remitted INR 9,754 crore to various foreign jurisdictions during the same period.
For the fiscal year ending March 31, 2021, Byju's reported a loss of INR 4,588 crore which was 19 times greater than the previous fiscal. It also saw its valuation tanked. As of January 2024, Byju's was valued at $200 million, a sharp fall from its peak of $22 billion in 2022.
