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Major investors of embattled edtech firm Byju’s voted to oust founder Byju Raveendran as the chief executive officer (CEO) on Friday after a Zoom call that lasted for hours. The decision, made during an Extraordinary General Meeting (EGM), sent shockwaves through the education technology sector. The move, led by investors like Prosus NV and Peak XV Partners, was fueled by allegations of mismanagement and other challenges faced by the edtech giant.
Turbulent EGM Proceedings
The EGM, a crucial juncture for Byju’s, faced disruptions as employees attempted to thwart the voting process. Reports from Bloomberg suggest that unidentified participants resorted to using whistles and loud noises multiple times during the meeting. Despite these disturbances, over 60% of the investors voted in favor of removing Raveendran from his role, marking a significant blow to his once-stellar reputation in India’s edtech landscape.
Prosus NV and Peak XV Partners Lead the Charge
Among the major investors pushing for leadership change, Prosus NV and Peak XV Partners played a pivotal role. Citing mismanagement and other challenges at Byju’s, these influential stakeholders rallied support for the ouster of not only Raveendran but also his family members from leadership positions within the company. The move represents a significant loss of confidence in the founder, who was previously hailed as a poster boy of India’s edtech sector.
Byju’s Rejects Investor Resolutions
In response to the EGM outcome, Byju’s released a statement rejecting the resolutions passed by the investors. The company, in a statement quoted by Bloomberg, declared the resolutions “invalid and ineffective.” Byju’s went further to assert that the EGM, attended by a select group of shareholders, was deemed “invalid” by the founder and his family members, who did not attend the meeting.
Legal Battle Unfolds
While the investors have voted for Raveendran’s removal, the decision faces a legal hurdle. Byju Raveendran filed a petition against the EGM, and the Karnataka High Court ruled to suspend any resolutions passed during the meeting until the next hearing on March 13. This ruling, however, does not halt the proceedings. Byju’s, anticipating the legal battle, has maintained its stance, deeming the resolutions as “invalid and non-binding.” The fate of Raveendran and his family hinges on the court’s verdict in the upcoming weeks.
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Conclusion
The turmoil at Byju’s, once a shining star in the edtech realm, underscores the challenges faced by even the most prominent players in the industry. The fallout from the EGM has not only shaken the leadership of the company but also raised questions about corporate governance and the future trajectory of Byju’s. As the legal battle unfolds, the edtech sector braces for potential ramifications that could extend beyond this high-profile case.