Shareholder action against Byju Raveendran: Shareholders of Byju's seek to oust founder Byju Raveendran from leadership
Shareholder action against Byju Raveendran : Shareholders of Byju's expressed serious worries about the company's future stability under the current leadership, stating that they are "deeply concerned."
Shareholders of the edtech firm Byju's are pushing for a change in leadership, aiming to remove the company's founders. This move follows a significant downturn for the edtech giant, marked by mass layoffs and a sharp decline in its valuation. Merely two years ago, back in 2022, Byju's was considered a top-tier startup led by billionaire Byju Raveendran.
Shareholders of Byju's have expressed serious concerns regarding the company's future stability under the current leadership. In a statement released by Prosus Ventures, which holds a 9% stake in Byju’s, they indicated having support from other shareholders, though unnamed. According to a Reuters report, Sofina and Peak XV (formerly Sequoia Capital India) have also endorsed the statement.
A Livemint report reveals that General Atlantic, Prosus Ventures, Peak XV, Chan Zuckerberg Initiative, and others have jointly called for an extraordinary general meeting (EGM) to suggest a reconstitution of Byju’s board. The report quotes an insider, stating that the notice for the meeting was sent after Byju’s failed to respond to an EGM requisition notice sent in both July and December. The individuals involved emphasized that the EGM was convened in the best interest of the company and its shareholders.
Investors have called for a meeting to address governance, management, and compliance concerns, aiming to restructure the board to reduce control by the founders, leading to a shift in leadership. Byju's faced challenges throughout the previous year, marked by Deloitte resigning as its auditor. Deloitte cited a lack of necessary documents, despite multiple requests to the board. Byju’s also faced delays in releasing financial statements for the year ending March 31, 2022.
Last year, board members representing Peak XV, Prosus, and Chan Zuckerberg Initiative resigned from Byju's board.
Raveendran previously drew inspiration from William Ernest Henley's 'Invictus' in a letter to shareholders, expressing resilience in the face of challenges. He conveyed, "In the clutch of circumstance, I have not winced nor cried aloud. Under the bludgeonings of chance, ‘My head is bloody, but unbowed.’" In the letter, he emphasized that a prompt capital raise would furnish the company with the necessary resources for rebuilding and scaling. The funds, he stated, would be utilized to sustain business operations, manage obligations, and enhance the overall sustainability of the company.
Byju’s, considered a standout success in the startup world, has experienced a decline in valuation to a range between $1 billion and $3 billion, according to estimates from certain investors.
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