Byju Raveendran holds EGM amid crisis, proposes setting up Board Advisory Committee

Byju's holds EGM on July 4 amid crisis

Byju's founder Byju Raveendran organised an extraordinary general meeting (EGM) of the crisis-ridden edtech company on July 4, following the resignations of three key directors and the auditor, to address ongoing company issues.

In the meeting, the company's founder Byju Raveendran told shareholders that it will be forming a Board Advisory Committee (BAC) to provide advice and guidance to the CEO on matters pertaining to the composition of the board and the governance structure suitable for Byju's.

"The BAC will serve as a working group consisting of independent directors with credible backgrounds and relevant experience from diverse corporate fields," Raveendran told shareholders.

Raveendran told shareholders that the company will soon be organising another EGM in approximately three weeks when the members and composition of the Board Advisory Committee will be discussed.

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During the meeting, attended by a majority of Byju's 70+ shareholders, investor representatives posed questions to Byju Raveendran, Divya Gokulnath (his wife and director), and the newly appointed CFO Ajay Goel, seeking updates on the Aakash IPO timeline, the company's audit, progress regarding the TLB resolution, and the long-pending fundraising efforts.

Byju's has been in a tiff with its term loan B lenders since December last year. Both the parties, Byju's and the bondholders, have sued each other in different courts in the US.

Raveendran assured that the company is involved in active and constructive discussions with bondholders and "there are reasons to be optimistic about a mutually acceptable resolution." He further emphasised that both parties involved in the issue are motivated to avoid legal proceedings and seek a resolution that benefits all involved parties.

Goel, meanwhile, said that the company's newly-appointed auditor BDO, has already begun the audit for Aakash Educational Services, WhiteHat Junior, Think & Learn and the overall consolidated group. Byju's, however, is yet to file BDO's appointment officially with the Ministry of Corporate Affairs (MCA). Goel said that BDO has allocated "significant resources" for the audit.

"The audit for most of the subsidiaries for FY22 has been successfully completed. However, the audit for Aakash, WhiteHat Junior, and Think & Learn (Byju's parent company) is currently underway in parallel, with the aim of optimising the timelines," Goel told shareholders.

Gokulnath briefed the shareholders about the company’s media outreach and external communication activities and said that the overall social media sentiment for Byju's in the last week was 82 percent positive, as measured by an independent agency.

Earlier this week, newspaper Mint reported that certain investors of Byju's were seeking ouster of Raveendran. Byju's, however, denied it. Independent investor representatives, Saurabh Gupta from DST Global and Alan Kim from ARK Impact Asset Management also denied such discussions.

Last month, three key directors representing some of the largest shareholders of Byju's--GV Ravishankar of Peak XV Partners (Sequoia Capital India), Russel Dreisenstock of Prosus and Vivian Wu of Chan Zuckerberg Initiative, stepped down from the board of Byju's over differences with founder Raveendran. The same day, Deloitte, Byju's auditor and one of the largest audit firms globally, also resigned citing a "long delay" in the company's FY22 (2021-22) results.