Byju's founder and CEO Byju Raveendran has told shareholders of the embattled edtech firm that he and his family won't take part in the extraordinary general meeting (EGM), called on February 23 to oust the leadership, which would invalidate the process.
"It is with firm resolve that I inform you that neither I nor any other Board member will attend this invalid EGM. Under the AOA and the SHA, the attendance of at least one of the Founders is necessary to form the quorum for a valid EGM," he wrote, in a letter sent to shareholders late on February 23.
"This means that the EGM, if it is still summoned, will not have the required quorum and cannot proceed to discuss or vote on the agenda. In particular, if there is no quorum within half an hour of the scheduled time (i.e. by 930am IST), then under Clause 39(a) of the AOA and Clause 4.8(a) of the SHA, the EGM cannot commence," he added.
Moneycontrol has reviewed a copy of the letter.
Raveendran, his wife and co-founder Divya Gokulnath, and brother Riju Ravindran together hold 26 percent of shares in the company. Investors seeking their ouster held over a 30 percent stake in the company as of June 2022.
Byju’s had filed a petition in the Karnataka High Court to restrain the shareholders from holding the EGM.
While the court said that the implementation of resolutions passed would be subject to the final hearing on March 13, it allowed investors to go ahead with the EGM.
In the EGM, which begins within minutes of this story being published, investors will vote on founder ouster, restriction on share transfer and changes to shareholder agreement among other issues.
This meeting come even as Byju's rights issue to raise $200 million, at a valuation cut of 99 percent, has been fully subscribed. The “dissenting investors” stand to have their stakes diluted massively if they do not participate in the issue till February 29.
In the letter, the founder said he maintains the position that the EGM is "procedurally invalid" and added that Byju's legal team has sent an email to shareholders.
"...These investor representatives unfortunately have assumed the roles of judge, jury and executioner of our company. But what is being presented to you by them as persuasive reality is, in fact, an illusory mirage. We are confident of getting a favorable final verdict in our favour...," he said.
The investors dissenting against the company's management 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.
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