Major foreign investors in Byju’s, the beleaguered Indian edtech giant, have sought the intervention of the Supreme Court of India. The investors, who together hold a substantial stake in the company, have raised concerns about the ongoing insolvency proceedings against Byju’s, spearheaded by US lender GLAS Trust Co LLC, reports Reuters.
The investors, including General Atlantic Singapore TL Pte Ltd, Peak XV Partners Investments IV and V, Sofina S.A., and MIH Edtech Investments, collectively own 16.75% of the issued and paid-up share capital of Think & Learn, Byju’s parent company. Their move to the Supreme Court stems from what they describe as “persistent acts of oppressive opacity, repeated violation of law and corporate governance norms, and gross mismanagement by the founders.”
At the heart of the investors’ grievances are allegations of financial mismanagement and irregularities by Byju’s leadership. The investors have cited instances of the company failing to disclose crucial information, including an ongoing investigation by the Enforcement Directorate (ED), as well as accusations of siphoning off $533 million, as claimed by American lenders. The investors have also raised concerns about the company’s failure to declare its financial records for the fiscal year 2023.
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The investors’ petition to the Supreme Court comes as they seek to protect their interests amid the escalating legal battles. They have highlighted the potential impact of the insolvency proceedings on their ongoing case of oppression and mismanagement (O&M) against Byju’s founders—Byju Raveendran, Riju Ravindran, and Divya Gokulnath—and the company’s chief strategy officer, Anita Kishore. Filed with the Bengaluru bench of the National Company Law Tribunal (NCLT), the case aims to remove the founders from the board and challenge the rights issue floated by the company, which they allege was designed to dilute their shareholding and consolidate control in the hands of the founders.
The Supreme Court’s decision in this matter could have far-reaching consequences, not only for the investors but also for the future of Byju’s as a whole. The investors argue that their rights and interests are intricately linked with the outcome of the insolvency proceedings, and any adverse ruling could jeopardize their stake in the company. And if this is not enough, there is also the involvement of Voyager Infosec, a Delhi-based operational creditor of Think & Learn, which has also approached the Supreme Court. Voyager Infosec, which claims to be directly affected by the insolvency proceedings, provided digital market research, campaign designing, and consultancy services to Byju’s and is owed Rs 3.04 crore.
