Byju’s petitioned the court challenging the EGM called by a group of investors, who are seeking the removal of Byju Raveendran as its chief executive. The company claimed that by calling for an EGM, the investors violated the shareholders’ agreement.
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In a statement Wednesday evening, the Bengaluru-based firm said it filed the petition under Section 9 of the Arbitration and Conciliation Act, 1996, against investors including Prosus, General Atlantic, Chan Zuckerberg Initiative, Owl Ventures, Peak XV Partners (formerly Sequoia Capital), SCI Investments, SCHF PV Mauritius, Sands Capital, Sofina and T Rowe Price Associates.
A copy of the high court order that ET has seen said if the shareholders make a decision at the EGM, it “shall not be given effect to, till the next date of hearing”.
Sources close to the investor group said the EGM will take place on Friday as planned and a group of investors are planning to vote on the removal of Raveendran as CEO.
The group could also appeal the high court division bench’s interim order in the Supreme Court.
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Serious disagreements between Byju’s and this group of investors, which came out in the open earlier this month, underscore the widening rift between the two sides.Byju’s in a statement said it presented “compelling evidence and multiple exhibits to support its case”.
in its bid to prevent these investors from disrupting the company’s operations by depriving it of urgently needed capital.
The cash-strapped edtech firm said the EGM proposal to rejig the company board, which includes Raveendran, his wife and cofounder Divya Gokulnath and brother Riju Ravindran, was “merely a smokescreen” aimed to “disrupt the management, control, and functioning of the company”.
Lenders who had extended a term loan to Byju had filed a case in a Bengaluru civil court against conversion of Manipal Group chairman Ranjan Pai’s stake in Byju’s subsidiary, Aakash Institute, ET had reported on February 6.
The appeal was rejected.
Byju’s, once India’s most valued privately-held startup at $22 billion, continues to face a severe cash crunch. Its founder Raveendran told shareholders on Wednesday that the proposed rights issue for $200 million has been fully subscribed, which pegs the value of the company at $220 million after the investment.
