Byju’s, the embattled edtech giant, is pushing back against the decision made by its shareholders to oust its founder from the position of chief executive officer. The company has labeled the resolutions passed at a recent shareholders’ meeting as “invalid,” citing the absence of its founders.
According to Byju’s, the presence of at least one founder-director is necessary to establish a valid quorum for such meetings. However, neither Byju Raveendran, nor his wife, nor his brother were in attendance at the meeting, rendering the resolutions ineffective and void, the company stated.
Shareholders, including major investors like Prosus NV and Peak XV Partners, voted to remove Byju Raveendran from his CEO position, signaling discontent with his leadership as the company grapples with various challenges to its business operations.
Despite the shareholder decision, the implementation of the outcome has been postponed until March 13, pending a hearing in the Karnataka High Court. Byju Raveendran has challenged the validity of the meeting, and both sides are expected to present their arguments before the court.
The shareholders’ meeting, conducted virtually, was reportedly disrupted by several individuals attempting to join the Zoom call. Bloomberg reported loud noises and whistles during the meeting, attributed to unknown participants.
Once hailed as a high-flying online tutoring startup valued at $22 billion in 2022, Byju’s has faced a dramatic decline in its valuation, plummeting by 90% since then. In a bid to weather the storm, the company has been forced to implement significant job cuts.
Adding to its woes, Byju’s recently experienced the resignation of its auditor, Deloitte, and became embroiled in a lawsuit in the US over loan payment terms. Additionally, it faces scrutiny from the Enforcement Directorate regarding alleged violations of the Foreign Exchange Management Act (FEMA).
The edtech industry, once considered a lucrative sector, has been witnessing upheaval in recent times, with companies grappling with regulatory challenges, financial pressures, and shifting consumer preferences. Byju’s, once a poster child of the sector, now finds itself navigating a precarious path amid mounting obstacles and internal strife.
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