In a stunning turn of events, Byju’s, once touted as India’s most valuable ed-tech startup, is grappling with internal strife as a group of investors voted to oust its founder and CEO, Byju Raveendran. The move comes after a prolonged period of unrest among major shareholders, citing concerns of mismanagement and financial irregularities. This article delves into the reasons behind Raveendran’s removal, the process involved, and the reactions from both sides.
Why Raveendran Was Removed:
The decision to remove Byju Raveendran stems from more than a year of discontent among some of the company’s largest investors. Allegations of financial mismanagement, governance issues, and a lack of accountability have plagued the $22 billion ed-tech giant.
Raveendran’s leadership has come under scrutiny, especially as the company faced challenges in restructuring and raising funds. The dissatisfaction among investors reached a tipping point, leading to the unprecedented move to vote him out.
An extraordinary general meeting (EGM) held on Friday became the battleground for the ousting of Raveendran. Major shareholders, including Prosus Ventures and Peak XV Partners, collectively holding over 60% of Byju’s ownership, voted in favour of removing Raveendran as CEO.
The shareholders also passed resolutions to reconstitute the board, challenging the founders’ control. Raveendran and other board members did not attend the EGM, and the decision’s validity is now a subject of legal contention.
High Court Hearing:
Byju’s, in a swift response, questioned the legitimacy of the resolutions passed during the EGM. The company dismissed the decisions, stating that only a “small cohort of select shareholders” attended the meeting, deeming their choices “invalid and ineffective.”
Raveendran and his family, who own 26.3% of the company, have contested the EGM’s procedural validity and have called it into question. The vote outcome is not applicable until March 13, pending a hearing in the Karnataka High Court.
BYJU’s Future:
The removal of Byju Raveendran from the company’s helm raises questions about the future direction of Byju’s, a company that once stood as a symbol of success in the Indian startup ecosystem. The legal battle over the legitimacy of the EGM’s resolutions adds another layer of complexity to the situation. The ongoing turmoil may impact the company’s ability to attract funding and retain its position in the highly competitive ed-tech market.
Conclusion:
The unexpected removal of Byju Raveendran as CEO of Byju’s marks a significant development in the company’s journey. As the legal battle unfolds, the ed-tech giant finds itself at a crossroads, grappling with internal challenges at a time when external pressures on the sector are already intense.
The repercussions of this episode will undoubtedly reverberate across the Indian startup landscape, shaping the narrative of corporate governance and leadership in the country’s burgeoning ed-tech sector.
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