Karnataka High Court extends interim order till March 28, preventing Byju’s shareholders from implementing decisions made at EGM. CEO Byju Raveendran faces shareholder dispute as investors seek his ouster, but court intervention delays resolution.
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BENGALURU: On Wednesday(13th March),The Karnataka High Court has granted a temporary reprieve to Byju Raveendran, the embattled CEO of the renowned edtech giant, Byju’s. On March 13, the court decided to extend its interim order until March 28, thereby preventing Byju’s shareholders from implementing any decisions that were anticipated to be approved during the extraordinary general meeting (EGM) held on February 23.
This contention originated from an extraordinary general meeting (EGM) wherein distinguished investors such as Prosus, General Atlantic, and Peak XV sought to remove CEO Byju Raveendran from his position at the helm of Byju’s. However, their endeavors were hindered by a restraining order issued by the Karnataka High Court, impeding the implementation of the resolution.
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The court session on March 13 was succinct yet eventful. The investors presented their case, alleging that Byju’s had secured the interim order through deceitful means. In a counterclaim, Raveendran accused the investors of perjury, pointing out inconsistencies regarding the dates on which the affidavits accompanying the statement of objections were submitted. The court, addressing these allegations, instructed Byju’s to formalize their accusations in writing, stating:
“if they want the court to take notice of it.”
Subsequently, the proceedings were adjourned as Byju’s requested additional time to prepare a comprehensive response to the investors’ objections.
The confrontation is a petition filed by Byju’s on February 21, under section 9 of the Arbitration and Conciliation Act. The company sought judicial intervention to prevent its shareholders from conducting the EGM slated for February 23. Although the High Court did not halt the EGM, it mandated that the investors refrain from implementing any resolutions passed during the meeting until March 13. The call for the EGM was supported by a notable list of investors, including General Atlantic, Chan Zuckerberg Initiative, MIH EdTech Investments, Own Ventures, Peak XV Partners (formerly known as Sequoia Capital India & SEA), SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, Sofina, and T. Rowe Price Associates.
ALSO READ: Byju’s |Karnataka High Court Grants Interim Relief, Puts EGM Ouster on Hold
Amidst the ongoing legal battle in the Karnataka High Court, a faction of the investors turned to the National Company Law Tribunal (NCLT) with grievances concerning Byju’s rights issue. While the NCLT has yet to issue a definitive ruling on the matter, it has instructed Byju’s to deposit the proceeds from the rights issue into an escrow account. Furthermore, the tribunal advised Byju’s to contemplate extending the deadline, thereby safeguarding the interests of the investors.
