BYJU'S EGM latest news: Think and Learn Private Ltd, the parent company of BYJU'S, announced on Thursday that neither its founder and CEO, Byju Raveendran, nor any other board member would participate in the extraordinary general meeting (EGM) called by select investors today, February 23, 2024.

Shareholders at BYJU'S are poised to cast their votes on a resolution aimed at removing founder CEO Byju Raveendran and his family members from their positions, citing alleged mismanagement and failures.

BYJU'S has dismissed the EGM as "procedurally invalid," asserting that it contradicts the company's article of association and shareholder's agreement.

A spokesperson for BYJU'S stated, "Byju Raveendran or any other Board member will not attend this invalid EGM. This means the EGM, if it is still summoned, will not have the required quorum and cannot proceed to discuss or vote on the agenda. As custodians of BYJU'S, it is the responsibility of the founders to respect the established procedures of law and protect the company's integrity."

Founders and board members of BYJU'S collectively hold approximately 22 per cent stake in the company.

The EGM notice has garnered support from significant investors including General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, who together account for about 30 per cent stake in BYJU'S.

The proposal to oust founder CEO Byju Raveendran and his family members stems from discontent among shareholders over alleged mismanagement and failures at what was once hailed as India's premier tech startup.

However, the outcome of the vote at the EGM won't take effect until March 13, pending a hearing at the Karnataka High Court where Raveendran is challenging the move by certain investors.

The Karnataka High Court declined to stay the EGM, which was called by shareholders holding more than 32 per cent stake in BYJU'S. Raveendran and his family own 26.3 per cent of the company.

The EGM notice seeks to remove the current board of Think & Learn, the entity operating BYJU'S, comprising Raveendran, his wife and co-founder Divya Gokulnath, and his brother Riju Ravindran.

BYJU'S, grappling with the aftermath of the pandemic and financial strain exacerbated by the acquisition of Aakash, has faced additional challenges in the past year, including auditor resignations, lenders initiating bankruptcy proceedings against a holding company, and a US lawsuit disputing loan terms.

Once valued at $22 billion in 2022, BYJU'S current valuation stands at $200 million following a rights issue.

In an attempt to assuage investor concerns, Raveendran has pledged greater transparency regarding fund utilisation and committed to board restructuring, including the appointment of two non-executive directors by mutual consent of the founder and shareholders.

The reasons cited for seeking the ouster include alleged financial mismanagement, value erosion due to failure to enforce legal rights, and concealment of material information.

The EGM notice alleges financial mismanagement, failure to address Enforcement Directorate's show cause notice, unresolved term-loans, conflicts with BCCI over cricket sponsorship, and Raveendran's purported misleading statements to shareholders regarding a term-loan.

Other grievances include incomplete audits, delayed payments of statutory obligations, including taxes and provident fund deductions, and delays in settling obligations to employees who have left the company.

(With PTI inputs.)