Updated February 23rd, 2024 at 14:31 IST

Byju’s investor consortium submit memo to NCLT on 'unfit founders': Sources

Investors have raised point of loss of control of BYJUs on Aakash and $1.2 bn term loan default.

Reported by: Saqib Malik
Challenges for BYJU'S | Image:Byju Raveendran
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Investors knock NLCT:  A group of as many as four investors has approached NCLT to file an Oppression and Mismanagement Suit against Byju and management to declare founders as unfit to run the company, appoint a new board, declare the rights issue as void, among others, highly placed sources told Republic Business

One of the key concerns raised by investors include the point of loss of control of BYJUs on Aakash,” said sources, adding that a term loan default amounting to $1.2 billion,  and the company without a Chief Financial Officer (CFO) and independent director were among other pressing issues, that investors have been highlighting.  Sources said wilful default in sharing information with shareholders has been investors worry as well. 

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The memo submitted to NCLAT has been signed by  General Atlantic, Owl Ventures, Prosus, PeakXV, and Sofina, said the source. The counting of votes by an independent observer and the outcome will come to the fore in the  next few hours, sources said. The Byjus EGM was set to conclude at 12.30 pm.  

As many as six investors including Prosus, PeakXV, General Atlantic, Sofina , Chan Zuckerberg initiative, and Sands Capital have sought loss of control, said sources privy to the matter said. On Thursday, Republic Business, citing highly-placed industry sources had reported that as many as 75 per cent investors of the embattled edtech firm will be voting in favour of CEO Raveendran Byju’s ouster. 

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Byju's statement 

A Byju’s spokesman, in a statement, had said that holding the EGM was in gross violation of the Companies Act, 2013.  Notably, neither CEO Raveendran Byju, nor his wife or brother are in attendance at the EGM, which was underway till the filing of this report.  Byju's did not respond to a query from Republic Business

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The EGM was marred by a phishing attack at its outset, followed by board members joining in most possibilities may not see a concrete outcome, leading to its rescheduling.  

Inconspicuous Byjus 

The Byju's EGM, sans Founder Byju Raveendran, and his inconspicuous family, has further deepened the Enforcement Directorate web on Byju Raveendran, who is on the run. Financial experts have pointed out that violation of the Foreign Exchange Management Act (FEMA).  BYJU's top investors are gunning for CEO Byju Raveendran. Not just the startup-hero-turned-villain Raveendran but his family too, glorified edtech to milk the startup cow. Byju Raveendran’s fall from grace is lead by alleged accounting lapses, financial discrepancies, and mismanagement. The first victims of Byju’s saga are over 10,000 employees left high and dry. 

BYJU's top investors are gunning for CEO Byju Raveendran. Not just the startup-hero-turned-villain Raveendran but his family too, glorified edtech to milk the startup cow. Byju Raveendran’s fall from grace is lead by alleged accounting lapses, financial discrepancies, and mismanagement. The first victims of Byju’s saga are over 10,000 employees left high and dry. 

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The resolution if passed on the ouster of Raveendran and his family will not be set in motion until March 13, as the Karnataka High Court is scheduled to hear the petition filed by Byju's CEO against investors.

 

 

 

 

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Published February 23rd, 2024 at 14:11 IST