Inside the Byju's EGM: the bid to remove CEO Byju Raveendran and reorganize the board

The initiation of an extraordinary general meeting (EGM) by Byju's investors, aimed at removing CEO Byju Raveendran and restructuring the board, encountered significant disruptions.

According to multiple media reports, Few people allegedly attempted to sabotage the meeting through a series of actions, including "phishing" attacks and unauthorized attendance.

The meeting, which was scheduled to start at 9 am, was delayed by an hour due to these disruptions. Attendees reported random messages in support of Raveendran and background noises intended to interrupt the proceedings.

The investor concerns and allegations

Earlier, the group of investors raised concerns about the management's failure to enforce the company's rights related to the acquisition of Aakash Institute and the agreement to unfavourable loan terms. 

These investors, collectively holding over 30% of the stake, aim to remove Raveendran, along with his wife, Divya Gokulnath and brother Riju Raveendran from the board, citing corporate governance lapses.

Verification challenges and voting Process

The meeting also faced challenges in verifying attendees, with the number of participants initially swelling to 170 before being reduced to 37 after a rigorous verification process. The process was further complicated by individuals attempting to join the meeting under false pretences, including impersonating investors.

Despite these obstacles, the meeting proceeded with the voting process and the results are expected to be announced following scrutiny by an independent auditor.

Did the founders attend the meeting?

Byju's earlier said that its founder Byju Raveendran, along with other board members including his wife, Divya Gokulnath, and brother, Riju Raveendran, will not attend the extraordinary general meeting (EGM) scheduled by the company's investors on February 23.

The company said that the EGM is invalid due to procedural, contractual, and legal issues, claiming it contradicts the company's Articles of Association (AOA) and Shareholders' Agreement (SHA), as well as the Companies Act, 2013.

Legal and financial turmoil

Byju's, once celebrated as India's most-valued startup, has been embroiled in controversy, facing allegations of accounting irregularities, mis-selling of courses, and mass layoffs. The company's attempt to raise fresh capital amidst these challenges has been further complicated by legal battles, including temporary relief from the Karnataka High Court against the EGM's decisions and various insolvency petitions.

The outcome of the EGM, pending legal review, could significantly impact Byju's leadership and governance structure. However, Earlier this week, the Karnataka High Court stated that until it delivers a final verdict, any resolution made at the EGM will not be considered valid.

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