Byju's Vs Investors: Karnataka HC extends interim protection against EGM resolution till March 28

Byju Raveendran gets temporary relief

In a relief to Byju Raveendran, the Karnataka High Court on March 13 extended till March 28, its interim order asking Byju’s shareholders not to bring in effect any resolutions expected to be passed during the February 23 extraordinary general meeting (EGM).

It maybe noted that on February 23, a  host of blue chip investors like Prosus, General Atlantic and Peak XV  voted to fire Chief Executive Officer (CEO) Byju Raveendran from edtech company Byju’s. However, the resolution could not be given effect to owing to the Karnataka High Court order.

During a brief hearing today, the investors alleged that Byju's had obtained this interim order by fraud while Raveendran alleged that the investors had committed perjury as there are discrepancies with respect to the date on which the affidavit attached to the statement of objections were filed. However, the court directed Byju's to put their allegations on writing, if they want the court to take notice of it.

The case was thus adjourned after Byju's sought time to file a response to the objections filed by investors.

On February 21, Byju's filed a petition under section 9 of Arbitration and Conciliation act asking the court to restrain its shareholders from holding the EGM on February 23. While the HC refused to stay the EGM, it asked the investors not to give effect to any resolution passed in the case till March 13.

Among investors who have called for the EGM include General Atlantic, Chan Zuckerberg Initiative, MIH EdTech Investments, Own Ventures, Peak XV Partners (formerly Sequoia Capital India & SEA), SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, Sofina, and T. Rowe Price Associates.

Amidst the case being pending in the Karnataka High Court, some of the investors approached the National Company Law Tribunal (NCLT) against Byju's rights issue. While the NCLT has not passed any order on the rights issue, it asked the firm to keep the proceeds in an escrow account. It also asked Byju's to consider extending the last date so that the rights of the investors were not affected.