Bengaluru, Feb 21 (IANS): The Karnataka High Court on Wednesday ordered that any resolutions, proposed to be passed in the Friday meeting called by select Byju's investors to remove its founder Byju Raveendran as CEO and appoint a new board, are invalid until the final hearing and disposition of this petition.
The court passed the order on a petition filed by Think & Learn Private Ltd, the parent company of Byju’s.
The edtech major had filed the petition under Section 9 of The Arbitration and Conciliation Act, 1996. It argued that certain investors, including General Atlantic, Chan Zuckerberg Initiative, MIH EdTech Investments, Own Ventures, Peak XV Partners (formerly Sequoia Capital India & SEA), SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, Sofina, and T. Rowe Price Associates, had violated the Articles of Association (AoA), the Shareholders’ Agreement (SHA), and the Companies Act, 2013 by calling for an EGM on February 23.
The company had "evidence and multiple exhibits to support its case", seeking to prevent these investors from disrupting the company's operations by depriving it of urgently needed capital.
"The company remains confident in its ability to navigate the current challenges and thanks all its shareholders for their overwhelming participation in the ongoing rights issue," it said in a statement.
In its petition, the company highlighted that the purported reasons for the EGM, including the removal of Raveendran as CEO and Chairman, as well as Divya Gokulnath and Riju Raveendran as Directors, "were merely a smokescreen designed to disrupt the management, control, and functioning of the company".
The edtech firm argued that the proposed EGM was "devoid of merit", put forward to disrupt the ongoing rights issue which offers all shareholders an equal opportunity to maintain their shareholding in the company via participation.
Meanwhile, Byju's rights issue to raise $200 million at a 99 per cent valuation cut has been fully subscribed.
In a shareholders' letter accessed by IANS, Byju Raveendran said that the $200 million raise will give the company "the capital it needs to ensure that we can take care of the current liabilities and also provide sufficient growth capital to get us back to our former glory".