In yet another setback for Byju’s, a select group of investors of Think & Learn (T&L), the parent company of Byju’s, voted on and passed several resolutions, including the removal of chief executive officer (CEO) Byju Raveendran from the company and the change of the board, which currently includes his wife and co-founder Divya Gokulnath and his brother Riju Raveendran.

The investors, with about 60 percent of shareholding, voted in favour of passing the resolutions to overhaul leadership and governance in the company, said sources

“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,” said a spokesperson from Prosus, the investors that led the EGM.

They added that, as shareholders and significant investors, they are confident about the validity of the EGM meeting and its decisive outcome.

‘Resolutions invalid’

The extraordinary general meeting (EGM), which Raveendran, his wife, and brother — the only board members — decided not to attend, was faced several disruptions, reported businessline.

However, the edtech company Byju’s has termed the resolutions passed as invalid and ineffective.

“These resolutions were voted upon without the valid constitution of a quorum, as stipulated in Byju’s Articles of Association (AoA). According to Articles 38 and 39(a) of the AoA, at least one founder-director is required to form a valid quorum. As the founders did not participate in the meeting, the quorum was never legitimately established, rendering the resolutions null and void. This clarity is essential, as it has been grossly misrepresented in the media of late by various persons,” said Byju’s statement.

The EGM was held even as the edtech major secured an interim stay from the Karnataka high court, which said that any resolutions passed at the meeting would be contingent upon the final decision on a petition filed by the company.

Petition to NCLT

On Friday, a group of four investors led by Prosus moved the Bengaluru bench of the National Company Law Tribunal (NCLT), filing a petition for oppression and mismanagement of the company. The petition has been signed by four investors — Prosus, GA, Sofina, and Peak XV — along with support from other shareholders, including Tiger and Owl Ventures.

The investors are seeking to declare the founders unfit to run the company, appoint a new board, declare the rights issue as void, and conduct a forensic audit, among other reliefs, said investor sources.

The investors in the NCLT suit have also raised concerns, including financial mismanagement by the founders leading to losing control of Aakash, Byju’s Alpha (TLB loan) default, prolonged corporate governance issues, including non-hiring of a CFO & independent director, the oppressive nature of the $200 million rights offer, regulatory non-compliances, oppressive opacity, and wilful default in sharing information with stakeholders.