Updated February 2nd, 2024 at 17:21 IST
Byju Raveendran won't step down, investors can't vote out CEO: Byju's
Once valued at $22 billion and considered one of India's most successful startups, Byju's popularity soared with its online and offline education courses.
- 2 min read
Byju's leadership dispute: Beleaguered ed-tech major Byju's issued a statement on Friday, February 2, countering the leadership change demand made by its investors including Prosus. Byju's said that investors lack the authority to vote out its CEO, intensifying an ongoing standoff that has seen the startup facing a series of challenges.
Once valued at $22 billion in 2022 and considered one of India's most successful startups, Byju's popularity soared with its online and offline education courses. However, recent times have brought a series of setbacks, including the resignation of its auditor Deloitte, board members stepping down, and a legal dispute in the US over the terms and payment of a loan.
In response to a group of shareholders, including tech investor Prosus, requesting a meeting to address "financial mismanagement and compliance issues" and advocating for the removal of founder Byju Raveendran and a board restructuring, Byju's released a statement on Friday.
"Under these unfortunate circumstances, we would emphasise that the shareholder's agreement does not give them (investors) the right to vote on CEO or management change," Byju's stated, firmly defending the stability of its leadership.
Over the past year, Byju's has undergone a significant downsizing, resulting in thousands of employee layoffs. The company's valuation has also experienced a substantial decline in recent months, with some investors suggesting it now ranges between $1 billion and $3 billion.
"The company and our employees are paying the price for a stand-off triggered by some investors," Byju's remarked, highlighting the toll the ongoing dispute has taken on the company.
Currently in the process of raising $200 million through a rights issue of shares, Byju's emphasised the importance of this capital infusion for a successful turnaround. The startup stated that it has garnered support from multiple shareholders for the ongoing capital-raising efforts.
(With Reuters inputs.)
Published February 2nd, 2024 at 17:21 IST