The corporate landscape of Byju’s, India’s leading education technology company, has been embroiled in a tumultuous shareholder dispute, following recent attempts to oust its founders from key positions. Byju Raveendran, the CEO and founder, has issued a resolute statement asserting his continued leadership role in the company amidst the unfolding discord.
In a detailed letter addressed to the employees, Raveendran refuted claims made by a minority group of shareholders regarding the outcome of a crucial shareholder meeting. He disclosed that only 35 out of 170 shareholders, representing approximately 45% of the total shareholding, supported the resolution aimed at his removal. The low level of support, he argued, underscored the lack of consensus regarding the proposed changes to the company’s leadership structure.
Central to Raveendran’s defense is the assertion that the authority to modify the board’s composition and the CEO’s role rests exclusively with the board, as outlined in the shareholder agreement and company law. He emphasized the significance of these foundational documents in establishing the rules and procedures governing the company’s operations.
Raveendran further criticized the conduct of the Extraordinary General Meeting (EGM), where the resolutions for his removal were tabled, alleging significant violations of essential rules during the proceedings. He highlighted discrepancies related to the meeting’s quorum and its adherence to the company’s Articles of Association, casting doubt on the validity of the decisions made.
The resolutions passed at the contentious EGM included the removal of Byju Raveendran as CEO, along with his wife Divya Gokulnath and brother Riju Raveendran from their respective management roles and directorships. Moreover, shareholders, led by Prosus, a global technology investor, have initiated legal action against alleged oppression and mismanagement by the company.
The shareholder resolutions sought to address governance, financial mismanagement, and compliance issues within Byju’s, advocating for a reconstitution of the board to reduce founder control, according to a statement from Prosus.
As the shareholder discord intensifies, the future trajectory of Byju’s remains uncertain, with implications extending beyond its corporate governance framework. The clash between founder leadership and investor demands for reform underscores broader tensions within India’s burgeoning tech sector, where rapid growth often intersects with questions of accountability and governance.
The unfolding saga at Byju’s serves as a poignant reminder of the complexities inherent in navigating the intersection of entrepreneurship, investment, and corporate stewardship in the digital age.