Byju's EGM concludes as investors seek to oust Byju Raveendran and family from company

Byju's, which was once India's most-valued startup, has been under fire since the start of 2022 for a range of issues, including accounting irregularities, alleged mis-selling of courses, and mass layoffs.

An extraordinary general meeting called by Byju’s investors to oust the company’s chief executive officer and founder Byju Raveendran has concluded after voting and results are expected to be out in the next couple of hours, said sources.

The EGM faced a number of disruptions, as unknown people tried to allegedly sabotage the meeting by various means, according to investor sources.

Sources said that it took over an hour to complete the roll call and verify attendees as hundreds of individuals attempted to join the Zoom video-conferencing link of the EGM with all kinds of names like Sir Michael Knight, Natalia Cruz, Kevin Pietersen. Unidentified people also joined the meeting impersonating the company’s investors.

'Phishing attack'

“The day started with a phishing attack to attempt to disrupt the meeting. Attendees received a random notification from an unidentified source that the meeting is cancelled. However, the EGM kicked off as per schedule at 9 am IST,” said a person close to the developments.

From 170 people who tried to attend the EGM, the number of total joinees was reduced to 37 after verification of pre-authorised names, said people aware of developments. Of these, 8 are Byju's employee-shareholders, 5 people from the legal side and remaining 24 are investors.

Meanwhile, even as Raveendran, his co-founder and wife Divya Gokulnath, and his brother Riju Ravindran have decided to sit out of the meeting.

According to people aware of the developments, voting at the EGM is expected to end at 12:30 IST. Votes will then be counted and the outcome will be known a few hours later.

"Votes will go to an independent scrutiniser and they will send a report by afternoon IST," said a source.

How Byju's Board stacks up

To be sure, together the three board members hold about 26.3 percent of the shares in Think and Learn Pvt Ltd - the parent company of Byju’s, while the investors that are seeking their ouster have a shareholding of over 30 percent, as of June 2022.

These investors include General Atlantic, Chan Zuckerberg Initiative, Owl Ventures, Peak XV Partners (formerly Sequoia Capital India & SEA), Sands Capital Global Innovation Fund, Sofina, and T Rowe Price Associates.

However, a court order earlier this week has pre-empted the Board from enforcing any of the decisions taken in the EGM till the next date of hearing in March — in a petition filed by the company against its investors.

Byju's, which was once India's most-valued startup, has been under fire since the start of 2022 for a range of issues, including accounting irregularities, alleged mis-selling of courses, and mass layoffs.

The company has laid off thousands of employees in the last 12 months as it battled a double blow of drying venture capital funding and slowing demand for online learning services. Since then, its investor board members have left too, citing differences with Raveendran.

The company has tried to fix some of the problems since then. Its early investor Ranjan Pai ploughed in the capital, it set up an advisory council with veterans such as Mohandas Pai and Rajnish Kumar and elevated Arjun Mohan as CEO. It is also in talks to divest assets such as Great Learning and Epic.