- Four Byju’s investors file suit against founder Byju Raveendran
- Allegations of oppression, and mismanagement by CEO and top management
- Investors seek forensic audit and new board appointment
- Raveendran has staunchly defended his position, asserting that the allegations are baseless and the EGM is procedurally flawed.
- The outcome of the legal battle remains uncertain, with both sides digging in for a protracted struggle.
- As the controversy intensifies, it casts a shadow over Byju’s future and raises questions about the stability of India’s burgeoning edtech sector.
In a dramatic turn of events, four prominent investors of Byju’s, one of India’s leading edtech firms, have launched a legal onslaught against its CEO and founder, Byju Raveendran, challenging his fitness to lead the company. The investors have accused Raveendran and the top management of oppression and mismanagement, igniting a fierce battle for control at the National Company Law Tribunal (NCLT) in Bengaluru.
The lawsuit, filed by investors including Prosus, GA, Sofina, and Peak XV, alleges serious lapses in governance and decision-making within Byju’s. The petition seeks Raveendran’s removal from the board of directors and calls for a forensic audit of the company’s operations. Additionally, it demands the nullification of a recent rights issue, which raised $200 million in capital.
The dispute comes amid escalating tensions between Raveendran and dissenting investors who have long voiced concerns over the company’s direction. These investors have been pushing for changes in leadership, citing alleged failures and mismanagement that have tarnished Byju’s once-stellar reputation as a tech unicorn.
The timing of the legal action is significant, coinciding with a crucial extraordinary general meeting (EGM) where shareholders were set to vote on Raveendran’s removal. However, Byju’s has obtained a stay order from the Karnataka High Court, rendering the resolutions adopted at the EGM invalid, according to Raveendran.
In response to the legal challenge, Raveendran has staunchly defended his position, asserting that the allegations are baseless and the EGM is procedurally flawed. He has refused to attend the “invalid” meeting, citing the company’s articles of association (AOA) and shareholders’ agreement (SHA) as grounds for his absence.
The brewing conflict underscores deep-rooted disagreements over Byju’s governance and strategic direction. The investors leading the charge against Raveendran are adamant about effecting change, viewing his continued leadership as detrimental to the company’s interests. They argue that a new board and transparent oversight are imperative to restore investor confidence and drive sustainable growth.
The outcome of the legal battle remains uncertain, with both sides digging in for a protracted struggle. As the controversy intensifies, it casts a shadow over Byju’s future and raises questions about the stability of India’s burgeoning edtech sector. For now, all eyes are on the NCLT as it prepares to adjudicate one of the most contentious corporate disputes in recent memory.
(With inputs from agencies)
