A day after a group of Byju's investors launched a campaign to oust its leadership, the embattled edtech company said in a statement that its shareholder agreement does not give investors the right to vote on CEO or management change.
"Think & Learn Private Limited, the parent of BYJU’S, has noted with sorrow, statements from a select few investors calling for an extraordinary general meeting (EGM) to replace founder and group CEO Byju Raveendran. Under these unfortunate circumstances, we would emphasise that the shareholder's agreement does not give them the right to vote on CEO or management change," the statement said.
The company added that it will continue with the proposed $200-million rights issue that was announced earlier this week for existing shareholders. Byju's added that it has received encouraging responses from multiple investors.
The statement to the media comes after investors sought an extraordinary general meeting (EGM) to adopt resolutions on governance, financial mismanagement and compliance issues.
The resolutions being put forward for the EGM are also to reconstitute the Board of Directors, so that it is no longer controlled by the founders of Byju's parent company Think & Learn; and a change in leadership of the company.
“The criticality of the rights issue has been shared with all shareholders, with capital being pivotal for a successful turnaround. Unfortunately, the company and our employees are paying the price for a stand-off triggered by some investors,” said the company.
Byju’s also said that it has not had any external investor funding for nearly two years apart from the founder infusing over $1 billion. Earlier today, the company also sent a mail to its employees accusing the investors of conspiring in a moment of crisis.
The embattled edtech company, 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.
"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," added the company, in the statement.
Byju’s also said that it continues to update the working group on all crucial matters, including ongoing business restructuring, financial position and audits.
“TLPL has been turning around the business, cutting the monthly burn to near operational breakeven and working on an AI-led technological refresh soon. In context, the actions of some unnamed investors are disruptive at a highly challenging time,” added the company.
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