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Updated February 25th, 2024 at 16:36 IST

BYJU’s investors knock NCLT door, seek removal of Raveendran

The suit has also sought for declaring the $200 million rights issue by BYJU'S as void.

Reported by: Business Desk
BYJU'S
BYJU'S | Image:X Photo
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Investors seek justice: Embattled edtech BYJU'S investors have approached the National Company Law Tribunal (NCLT), seeking for the company's founder to be declared “unfit” to run the firm.

Signed by Prosus, General Atlantic, Sofina and Peak XV, the petition also seeks support from Tiger and Owl Ventures.

The group of four investors who have approached the Tribunal have filed an oppression and mismanagement suit against BYJU'S management before the Bengaluru bench of the NCLT, demanding that a new board be set.

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The plea has been filed in the interest of investors, to prevent any erosion of worth for shareholders. It also seeks to sustain value for other stakeholders, who are the employees and customers of the company.

Apart from it, the investors seek for the $200 million rights issue, raised after a 99 per cent cut from the $22 billion valuation in 2022, to be declared void.

The investors have also sought a forensic audit of the company over allegations of mismanagement and failures, as per a court filing of the NCLT.

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The investors have convened for a now-concluded EGM, expected to be shorter since the BYJU’S board will not be participating. Rife with disruptions and chaos, one of the agenda items in the EGM include a call for removing Raveendran and family from the BYJU’S board.

The investors seek the appointment of a new board and CEO, declaring the present management as unfit to run the company, the filing reads. 

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Other demands of the investors in the plea filed include a forensic audit, as well as directives to the management for sharing information with the investors.

Asking the Tribunal to obstruct BYJU’S from taking any corporate actions that prejudice the rights of investors, in light of the $200 million rights issue which was “fully subscribed” according to Raveendran, as void

The suit also raises concerns on financial mismanagement by the founders, which resulted in loss of control for the Aakash Institute, as well as BYJU’S Alpha Unit which defaulted on the $1.2 billion Term Loan B. It has also filed for bankruptcy as part of the Chapter 11 proceeding sin the US.

BYJU’S has also been dragged to court for stretched corporate governance issues, which include the non-hiring of a chief financial officer as well as an independent director.

The concerns regarding the rights offer also include regulatory non-compliance, the "oppressive nature" of the rights offer, "oppressive, opacity and wilful defaults" in sharing information with stakeholders as well as unauthorised corporate actions pertaining to the takeover of Singaporean edtech company Northwest Education Pte.

It also refers to the insolvency petitions filed by the BCCI, Term Loan B lenders based overseas and 

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The plea has also mentioned about inter-corporate loans on undisclosed terms and multiple insolvency petitions filed by BCCI, TLB lenders and digital marketing firm Surfer Technologies Pvt Ltd. 
 
(With PTI Inputs)

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Published February 23rd, 2024 at 20:16 IST

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