On 26th February, an investor group has filed a complaint with the National Company Law Tribunal (NCLT) in Bengaluru against Byju’s, the edu-tech start-up, alleging mismanagement within the company.
Bengaluru, Karnataka: On February 26th, Investor Group filed a complaint with the National Company Law Tribunal (NCLT) in Bengaluru against the edu-tech start-up Byju’s, citing allegations of oppression and mismanagement within the organization.
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The investors, including EdTech Investments, a Prosus NV subsidiary; General Atlantic Singapore; Peak XV Partners Operations LLC; and Sofina, have submitted their application to the Tribunal. However, the application is pending registration and scheduling for a hearing.
The group of investors is demanding a declaration stating that Byju Raveendran, the founder and CEO, along with the current management, is unfit to lead the company and should be removed from their positions.
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Additionally, they are seeking a declaration to nullify the recent ‘rights issue’ launched by Byju’s earlier in the month, citing concerns over the potential shareholding dilution of non-participating investors by up to 99%. Byju’s contends that all investors had already subscribed to the rights issue through the parent company, Think and Learn Pvt Ltd.
The Karnataka High Court, on February 22, issued a stay order against any decisions that could be made during an extraordinary general meeting (EGM) scheduled for February 23, which included discussions about Raveendran’s potential removal from the company.
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Byju’s argued that the EGM was convened without following the proper procedures outlined in the Companies Act, 2013, and aimed to reconstitute the Board of Directors.
Meanwhile, creditors of Byju’s have also filed petitions before the NCLT seeking to initiate insolvency proceedings against the company. The first petition was filed by Surfer Technologies, a digital marketing vendor, on February 6, followed by another from international lender Glas Trust Company LLC. A third petition was filed by a business process outsourcing (BPO) entity named Teleperformance Business Services, which was heard on February 8.
