BYJU’S Investors Call For EGM To Change Leadership, Reconstitute Board

The tussle between embattled BYJU’S and its shareholders has taken a new turn, with major investors of the edtech giant calling for an extraordinary general meeting (EGM) to reconstitute its board and change its leadership.

Currently, BYJU’S board comprises Byju Raveendran and his family members Divya Gokulnath and Riju Raveendran. Last year, three of its board members – Russell Dreisenstock of Prosus, Chan Zuckerberg Initiative’s Vivian Wu, and Peak XV Partners’ GV Ravishankar resigned. 

“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 investors collectively said in a statement. 

The resolutions being put forward for the EGM to consider include a request for addressing 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 BYJU’S; and a change in leadership of the company.

The shareholders said that the request for the EGM is being supported by a consortium of shareholders of Think & Learn, the parent of BYJU’S, and follows earlier notices of requisition sent to the company’s board in July and December 2023, which were disregarded. 

The latest development comes days after BYJU’S said it has kicked off a $200 Mn rights issue. The edtech giant is seeking to raise the fresh capital at a post-money valuation of $225 Mn, a whopping 99% decline from its last valuation of $22 Bn, sources told Inc42. 

It is pertinent to note that after the resignation of its representative from the board of BYJU’S last year, Prosus said that the reporting and governance structures did not evolve sufficiently for a company of that scale.

The beleaguered company has been fighting on multiple fronts over the last year or so. It continues to be plagued by a host of troubles, including the exit of board members, layoffs, delay in filing financial statements, growing losses, scrutiny of the Enforcement Directorate (ED), and a legal battle with the Board of Control For Cricket in India (BCCI).

Earlier this month, BYJU’S filed its financial statements for FY22 almost 22 months after the end of the year. Its consolidated net loss surged 81% to INR 8,245.2 Cr in FY22 from INR 4,564.3 Cr in FY21. Operating revenue rose over 120% year-on-year to INR 5,014.6 Cr during the year under review, mostly on the back of improvement in the financial performance of Aakash. 

In the financial statement, the startup’s auditor also flagged concerns regarding its continuing net losses from operations and accumulated losses and the outcome of the litigation of the $1.2 Bn Term Loan B availed by Byju’s Alpha Inc.