BYJU’s EGM to proceed as scheduled, investors to be present

Embattled edtech BYJU’s investors will take part in the extraordinary general meeting of the company on March 29, as per sources.

The EGM is scheduled to begin at 10 AM IST on Friday for shareholder approval to take up the authorised share capital of the company after it raised the $200 million rights issue last month. 

"Most of the investors, especially those who have gone to the NCLT, will participate in the EGM as it is the place to record their vote and raise issues," a source from the group of aggrieved investors of BYJU’s parent Think and Learn said.

A group of four investors - Prosus, General Atlantic, Sofina, and Peak XV - supported by other shareholders including Tiger and Owl Ventures sought intervention from the National Company Law Tribunal (NCLT) against BYJU's proceeding with its EGM. 

The disgruntled investors seek access to BYJU’s financial books, the source said, which is possible through the EGM.
NCLT’s Bengaluru bench on March 28 gave permission to the investors to access BYJU’s financial books. 

In February, the group of investors had called for an EGM to oust founder and CEO Byju Raveendran as CEO of the company, and his family - wife Divya Gokulnath and brother Riju Raveendran - from the company’s board.

They alleged "mismanagement and failures" behind the resolution, with investor sources claiming that over 60 per cent of the shareholders voted in favour of removing the current management, reconfiguring the board and conducting a third-party forensic investigation into the company’s acquisitions. 

However, sources close to BYJU’s peg the figure at 47 per cent.

BYJU’s had approached the Karnataka High Court against the February EGM called by investors, after refusing to take part in the EGM. This development came on the backdrop of an ED notice issued to Raveendran over alleged FEMA violations amounting to over Rs 9,000 crore.

BYJU’s sought for the Court to invalidate the EGM as it was being called without following the proper procedure set out by the law and the company’s Articles of Association. 

BYJU’s said the passing of any resolution requires proper quorum and mandatory presence of some people - atleast one founder director as per the company’s articles. 

As per BYJU’s, the company on February 19 granted access to investors to look into its financial books, but they chose to move to the NCLT against the company instead. 

"Since the matter was sub-judice, the access to financial records was closed for them. The NCLT has now allowed access to financial books to investors. The company never objected to investors accessing financial books. Even before the rights issue they were given access to the documents, which were leaked by them to select media," BYJU’s sources said. 

BYJU’s resolution can only be passed if more than 50 per cent of shareholders vote in favour of it. Besides, investors can also vote through postal ballots till April 6. 

After the postal ballots are closed, the scrutinisers' report will be prepared.

(With PTI Inputs)