SUMMARY
The contentious extraordinary general meeting at BYJU’S has seen shareholders unanimously pass all resolutions according to the company’s investors
The Karnataka High Court is expected to hear an earlier petition filed by BYJU’S on the validity of the EGM
If the Karnataka High Court sides with the investors in its ruling, the company is likely to see a new CEO and board
The contentious extraordinary general meeting at BYJU’S has seen shareholders unanimously pass all resolutions, even as the company continued to maintain that the EGM itself was invalid.
In a statement to Inc42, Prosus, the lead external shareholder of the company, said, “At today’s Extraordinary General Meeting shareholders unanimously passed all resolutions put forward for vote. These included a request for the resolution of the outstanding governance, financial mismanagement and compliance issues at BYJU’s; the reconstitution of the Board of Directors, so that it is no longer controlled by the founders of T&L; and a change in leadership of the Company.”
The statement added: “As shareholders and significant investors, we are confident in our position on the validity of the EGM meeting and its decisive outcome, which we will now present to the Karnataka High Court in line with due process.”
Sources close to the investors told Inc42 that the resolutions were backed by investors who hold 60% of stake in the edtech major. In contrast, founder and CEO Byju Raveendran holds 23%-25% shareholding in the company.
However, the matter is far from over as the statement indicates. The Karnataka High Court is expected to hear an earlier petition filed by BYJU’S and a decision is likely to come on March 13, 2024.
If the Karnataka High Court sides with the investors in its ruling, the company is likely to see a new CEO and board appointed in the near future.
While the investor statement makes it clear that the resolutions sought — more on them here — have been passed, BYJU’S continued to dispute the validity of the EGM itself.
Citing unnamed media reports, a spokesperson for BYJU’S said that the meeting did not follow established procedures and was “marred” by technical glitches. It also claimed that the resolutions were passed by a select and a narrow group of shareholders, adding that the EGM suffered from numerous procedural irregularities and deficiencies.
“In any event, these resolutions merely request the Board to “consider” the recommendations passed at the EGM. They do not have any binding effect whatsoever on the company or its decision-making processes. As such, the resolutions lack the necessary authority to impose any obligations on BYJU’S or its directors,” added the company.
The edtech major also claimed that the investors flouted provisions of the company’s articles of association (AoA), which mandate the presence of at least one founder-director for the formation of a valid quorum. It added that the non-participation of founders rendered the quorum invalid and the resolutions “null and void”.
In addition, BYJU’S also slammed the investors, terming the EGM a media spectacle as “opposed to following due process”. Quoting media reports, the edtech went on to claim that a mere 20% of the company’s shareholders attended the “farcical” EGM.
However, sources in the investor group have disputed these versions of the events. As it is, the final decision on the matter is unlikely to come before March 13, 2024.
