BYJU’s also said founder Byju Raveendran and other board members will not attend the EGM
Think & Learn Pvt Ltd (the parent company of Byju’s) on Thursday said founder and CEO Byju Raveendran and other board members will not attend the extraordinary general meeting (EGM) on Friday sought by a group of shareholders for the ouster of Raveendran and family members.
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“This EGM is procedurally invalid, contractually in contravention of our AOA and SHA, legally on the wrong side of the Companies Act, 2013. Byju Raveendran or any other board member will not attend this invalid EGM,” said Byju’s spokesperson.
“This means that the EGM, if it is still summoned, will not have the required quorum and cannot proceed to discuss or vote on the agenda. In particular, if there is no quorum within half an hour of the scheduled time (i.e. by 930am IST), then under Clause 39(a) of the AOA and Clause 4.8(a) of the SHA, the EGM cannot commence,” he added.
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Raveendran, his wife and co-founder Divya Gokulnath, and brother Riju Ravindran together hold 26 per cent of shares in the company. Investors seeking their ouster held over a 30 per cent stake in the company as of June 2022.
Byju’s had filed a petition in the Karnataka High Court to restrain the shareholders from holding the EGM.
While the court said that the implementation of the resolutions passed would be subject to the final hearing on March 13, it allowed investors to go ahead with the EGM.
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In the EGM, which begins within minutes of this story being published, investors will vote on founder ouster, restriction on share transfer and changes to shareholder agreement among other issues.
This meeting comes even as Byju’s rights issue to raise $200 million, at a valuation cut of 99 percent, has been fully subscribed. The “dissenting investors” stand to have their stakes diluted massively if they do not participate in the issue till February 29.
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However, investor sources said, “EGM is valid and fully in accordance with applicable law and EGM will continue as per plan”. It’s incorrect to say that EGM won’t have a quorum if founders don’t attend, they said.
Byju’s has said these shareholders don’t have voting rights. “We would emphasise that the shareholder’s agreement does not give them the right to vote on CEO or management change,” the company said in an earlier statement.
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The investors dissenting against the company’s management include General Atlantic, Chan Zuckerberg Initiative, Owl Ventures, Peak XV Partners (formerly Sequoia Capital India & SEA), Sands Capital Global Innovation Fund, Sofina, and T Rowe Price Associates.
