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Byju’s, the edtech giant, is embroiled in a shareholder rebellion as investors have intensified their demands for the removal of founder and CEO Byju Raveendran and his family from the company’s board. This time, at an extraordinary general meeting (EGM) convened by a consortium of six investors on Friday, more than 60% of participating shareholders cast their votes in favor of removing the Raveendran family, citing concerns over “mismanagement and failures” that have led to the company’s current predicament. The once $20Bn+ valued poster boy of Indian startups is now desperate to raise a $200Mn rights issue at a $220Mn post money valuation.

The vote was spearheaded by major investors like Prosus and Peak XV Partners (formerly Sequoia India), who collectively hold over 32% of Think & Learn (T&L), Byju’s parent company, and are sweeping for reforms at a time when the upstart is already reeling from financial irregularities, compliance lapses, and governance deficiencies. The Karnataka High Court has emerged as the arbiter in this power struggle. The court, which had earlier allowed the EGM to proceed but placed any resolutions passed on hold, will deliver its verdict on March 13th.

For their part, Raveendran and his family have vehemently contested the legitimacy of the vote. They argue that the EGM lacked a quorum due to their absence and that of other board members, rendering the resolutions passed “invalid and non-binding.” Byju further asserts that the resolutions are merely requests and hold no legal weight. Speaking of the resolutions themselves, they encompass a gamut of transformative measures, including the ouster of the incumbent management, restructuring of the board, and a call for independent forensic audits into the company’s acquisition practices.

“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 shareholder group said in a statement, adding, “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.” And if this is not enough, four investors of Byju’s, representing about 25% ownership in the startup, earlier on Friday filed a suit at the National Company Law Tribunal on Friday to halt the recent rights issue to raise $200 million, which was revealed to be fully subscribed.

The current crisis at Byju’s can be traced back to its aggressive expansion spree pre-pandemic, fueled by investor capital and a booming online education market. However, the post-pandemic return to normalcy saw a sharp decline in demand for online tutoring, leaving Byju’s saddled with heavy debt and struggling to meet its financial obligations. Faced with mounting pressure, Raveendran has resorted to desperate measures to keep the company afloat. These include pledging personal assets, selling new shares at a steep discount, and launching a controversial rights issue. However, these actions have further eroded investor confidence and fueled accusations of mismanagement.