The Karnataka High Court extended the stay on the implementation of the resolutions passed by BYJU’s investors at the company’s EGM
This means that Raveendran will continue to helm of the troubled startup
The court’s decision today is the third successive stay ordered by it on the implementation of the resolutions
In a relief for troubled edtech startup BYJU’S, the Karnataka High Court on Tuesday (May 28) again extended the stay on the implementation of the resolutions passed by the investors at the company’s extraordinary general meeting (EGM) on February 23 this year.
The development was first reported by NDTV Profit. BYJU’s declined to comment on the court proceedings.
During the EGM, called by Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA, the shareholders passed multiple resolutions, including those calling for ouster of founder and CEO Byju Raveendran and removal of Divya Gokulnath and Riju Raveendran from their respective management roles.
Among the other resolutions passed were those calling for a change in the board structure at the edtech giant and a forensic investigation into the company’s acquisitions, alleged breaches, regulatory affairs, tax filings, and more.
The latest stay by the HC means that Raveendran will continue to helm the startup.
Earlier, BYJU’S
claimed that the EGM did not have the required quorum and any resolution passed during the EGM would remain ineffective.
The troubled startup first moved the HC two days ahead of the EGM, seeking temporary relief from any decisions taken by shareholders.
The court’s decision today is the third successive stay ordered by it on the implementation of the resolutions. It last stayed the resolutions in March.
During the March hearing, BYJU’S counsel argued that there were serious discrepancies in the affidavits filed by the investors’ representatives and it potentially amounted to “perjury”.
Upon hearing both parties, the HC directed them to make submissions on the issue before today’s hearing.
BYJU’S, once valued at a whopping $22 Bn, has been engulfed in legal battles, a severe cash crunch, fraud allegations, among others. The turmoil has shrunk its valuation to $225 Mn, a valuation on which it recently raised $200 Mn via a rights issue.
However, the cash-starved company is currently restricted from accessing the funds raised via the rights issue. After the company’s disgruntled investors moved the National Company Law Tribunal (NCLT) in February, the Tribunal instructed it to keep the proceeds from the rights issue in a separate escrow account.
Besides its war with its investors, the company has also been dragged to the courts by Oppo, Teleperformance, the Board of Control for Cricket in India (BCCI), publishing company McGraw Hill, BPO service provider Cogent E-services, and supplier of automation control products AG Automation.
Meanwhile, the company’s director and the CEO’s brother Riju Ravindran has also been found in contempt of court in the United States Bankruptcy Court for the District of Delaware.
Amid these problems, BYJU’S claims to have started working under a BYJU’S 3.0 model and has revamped its product pricing and sales strategy.
