Edtech firm Think and Learn Pvt Ltd, that operates under the brand name BYJU’S, stated on Friday that investors have no voting rights on CEO or management changes in accordance with the shareholder’s agreement.
At least six BYJU investors have asked for an Extraordinary General Meeting (EGM) to discuss concerns at the Edtech giant and remove founders from management of the company.
The company in the statement that it gave stated, “Think & Learn Pvt Ltd has noted with sorrow, statements from a select few investors calling for an EGM to replace founder and group CEO Byju Raveendran. Under these unfortunate circumstances, we would emphasize that the shareholder’s agreement does not give them the right to vote on CEO or management change.”
In the letter by the company that was seen by the employees consisted of that “We are pained to see this action from a few of the investors who should have supported us in our fight at these challenging times, instead of directly speaking to the media. The founders are the largest investors and the greatest fighters for Byju’s.”
In the EGM notification, the investors, led by Dutch investment firm Prosus, urged that the unresolved governance, financial mismanagement, and compliance concerns be resolved, as well as the Board of Directors be reconstituted.
A notice that was shared by the group of investors to the shareholders said, “The resolutions being put forward for the EGM to consider include a request for the resolution of 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 and a change in leadership of the Company.”
Byju’s stand on the matter
BYJU’S stated it will proceed with the scheduled USD 200 million rights issue after obtaining positive feedback from a number of investors.
In a letter for employees, it was seen that the firm noted “a slight delay in salary disbursements this month because of the artificially induced crisis by these select investors” and that the employees were assured by the firm that they will be paid their salary by a manner that will be phased which will start from 2nd February and will be completed by Monday (5th February).
The leadership of Edtech company
The edtech company stated that its leadership has kept the working group updated on all critical aspects, including ongoing business reorganization, financial status, and audits.
The statement issued stated, “Byju Raveendran and his leadership team have kept TLPL afloat after three investors left the company’s board last year, triggering a broader crisis. The company, along with the advisory board consisting of Rajneesh Kumar and Mohandas Pai, constituted a working group with the investors to find a constructive way forward.”
BYJU’S stated that the firm has not received any external investor capital in over two years, with the exception of the founder injecting more than USD 1 billion, which is why it is issuing a rights issue as a speedy and equitable means to generate funds.
The founder, Byju Raveendran said in his statement that “Unfortunately, the company and our employees are paying the price for a stand-off triggered by some investors. Business continuity is essential, and we shall prioritize this in our actions.”
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