Come Friday, shareholders of Byju’s parent company Think & Learn are expected to gather for a special meeting called by a group of investors to oust the edtech startup’s board led by founder Byju Raveendran.
To oust the three-member board comprising Raveendran, his wife Divya Gokulnath and his brother Riju Ravindran, majority (50% plus one share) of votes cast should be in favour of the resolution.
Raveendran and his family, the largest shareholders with a 26% stake in Byju’s, will vote against the proposal. Rules require that two members should be present at the extraordinary meeting (EGM) to form the quorum of the meet. In Byju’s case, its articles of association stipulate the presence of its promoter-director at the EGM and if the person doesn’t turn up at the meeting, the EGM can be adjourned by a week. At the adjourned EGM, even if the promoter-director is not there, the shareholders present at the meeting can form the quorum.
The group of investors, who have called the EGM and who together own over 25% stake in Byju’s, won’t be participating in the meeting as they do not have voting rights. This is because they had signed a shareholder agreement that does not give them voting rights. A source close to Byju’s said that three of the dissenting investors were on the board of the company till last year though they didn’t have any rights to board seats.
Other shareholders own over 45% in Byju’s, which was once India’s most valued startup. All the investors individually have a single digit holding in the company, the source said, adding that while investors don’t need voting rights to call the EGM, “voting on specific matters is delinked”.
The matters at the EGM will include a resolution of the outstanding governance, financial mismanagement & compliance issues, board reconstitution so that it is no longer controlled by the founders & a change in leadership of the company. Lawyers said the investors also have the option to move the company law tribunal against Byju’s and its board over minority shareholder oppression and mismanagement of the edtech firm’s affairs.
