Netherlands-based Prosus said the edtech giant’s reporting and governance structures did not evolve sufficiently for a company of that scale
Prosus added that the decision for its director to step down from the BYJU’S Board was taken after it became clear that he was unable to fulfil his fiduciary duty
Last month, in a new crisis for edtech decacorn BYJU’S, three of its board members tendered their resignations
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A month after Russell Dreisenstock of Prosus Ventures stepped down from BYJU’S board, the Netherlands-based VC firm said the edtech giant’s reporting and governance structures did not evolve sufficiently for a company of that scale.
“Despite repeated efforts from our Director, executive leadership at BYJU’S regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters,” Prosus said in a statement.
Prosus added that the decision for its director to step down from the BYJU’S Board was taken after it became clear that Dreisenstock was unable to fulfil his fiduciary duty to serve the long-term interests of the company and its stakeholders.
“BYJU’S sits at the intersection of India and Education, two very important and strategic areas of investment for Prosus. Although we no longer have a representative serving on the Board of the Company, we continue to believe in the potential of BYJU’S and its role in revolutionising access to quality education in India and around the world,” it said in a statement.
“As a shareholder, Prosus will continue to assert its rights, collaborating with other shareholders and government authorities to safeguard the long-term interests of the Company and its stakeholders,” it added further.
To recap, last month, in a new crisis for the edtech decacorn BYJU’S, three of its board members, including GV Ravishankar, MD of early-backer Peak XV Partners, Russell Dreisenstock of Prosus and Chan Zuckerberg’s Vivian Wu tendered their resignations.
Sources told Inc42 that at that time the three board representatives had been mulling exiting the company for the past several weeks due to a breakdown in trust and communication between them and BYJU’S cofounder and CEO Byju Raveendran.
There was also dissatisfaction over the way the company has dealt with the issues surrounding its $1.2 Bn Term B loan payment. BYJU’S sued its lenders over alleged harassment in the recovery of the loan.
However, in a major relief for the troubled edtech company, it has managed to get the steering committee (SteerCo) of its Term Loan B lenders to agree to sign a term loan amendment by August 3. As per the agreement, successful execution of the amendment would immediately solve the loan’s acceleration and end all open litigation.
Over the past 18 months, the Byju Raveendran-led edtech giant has been experiencing mounting challenges. Despite hitting a sky-high valuation of $22 Bn in March 2022 after raising $800 Mn in funding, it reported losses of more than INR 4,500 Cr for the year ended March 31, 2021.
It also came under the government agencies scanner including the Enforcement Directorate (ED), the Ministry of Corporate Affairs and the Employees’ Provident Fund Organisation (EPFO).
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