Investors of BYJU’s have requested to convene an extraordinary general meeting (EGM) to address the need for changes such as the ouster of its founder Byju Raveendran and to combat a range of issues that currently embroil the edtech firm.
According to sources, investors including Prosus, General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands Capital, signed a notice calling for a meeting to propose the reconstitution of the board of directors of BYJU’s.
“The resolutions being put forward for the EGM to consider include a request for the resolution of the outstanding governance, financial mismanagement and compliance issues; the reconstitution of the Board of Directors, so that it is no longer controlled by the founders of T&L [Think & Learn Private Limited, te parent company of BYJU’s]; and a change in the leadership of the company,” the investors said in the note, seen by DealStreetAsia.
BYJU’s did not respond to a request for comment from DealStreetAsia.
After the resignation of GV Ravishankar, a managing director at Peak XV Partners (formerly Sequoia Capital India), Russell Dreisenstock of Prosus, and Vivian Wu of Chan Zuckerberg in June, BYJU’s board comprises Byju Raveendran, his wife Divya Gokulnath and his brother Riju Raveendran.
“While we are grateful for the efforts of the independent advisory council in addressing some of the looming challenges facing T&L, we are deeply concerned about the future stability of the company under its current leadership and with the current constitution of the Board,” the shareholders said.
The request for the EGM is supported by a consortium of T&L shareholders and follows earlier notices of requisition sent to the T&L Board of Directors in July and December 2023, which were disregarded, the investors said in the note.
Once considered the poster child of edtech in India with a peak valuation of about $22 billion, BYJU has now come under scrutiny for a range of issues. Most recently, a group of ad-hoc term loan lenders, who collectively own more than 85% of BYJU’S $1.2-billion Term Loan B (TLB), filed a petition to initiate corporate insolvency resolution proceedings against TTLP.
“The issuance of this EGM notice follows many months of continued efforts by shareholders to engage with the company to address persistent issues relating to corporate governance, mismanagement and compliance. These efforts have been ongoing following the resignation from the board in June 2023 of directors nominated by Prosus and other shareholders,” the shareholders said
Earlier this month, the company filed its financial statements for FY22 after a long delay, according to media reports. Its consolidated net loss widened 81% to Rs. 8,245.2 crore in FY22 from Rs 4,564.3 crore in FY21 Operating revenue rose over 120% year-on-year to Rs 5,014.6 crore during the year under review, helped by Aakash.
Also this month, BYJU’s announced plans to raise $200 million via a rights issue to all its equity shareholders, reportedly at a throw away valuation.