As edtech decacorn BYJU’S faces a challenging period, its founder and CEO, Byju Raveendran, has reportedly become embroiled in the turmoil. At an extraordinary general meeting (EGM) held on Tuesday, a group of investors purportedly demanded Raveendran’s removal to make way for a new interim CEO.
While some investors supported the idea, others did not, and given the significant stake held by Raveendran’s family, a decision could not be reached, according to a source cited by Livemint. During the EGM, stakeholders questioned the founders and top management about the ongoing troubles at BYJU’S and sought clarifications on fund utilization and disclosure of the company’s pro-forma financials.
Concerns were raised about the status of the $910 million from the $1.2 billion Term Loan B, as investors claimed that they were not receiving monthly management information system (MIS) reports from BYJU’S. Additionally, Deloitte Haskins and Sells resigned as the auditor, and several key board members stepped down.
BYJU’S has also faced mounting losses, with losses increasing nearly 20 times year-on-year to INR 4,588 crore. The company has undertaken cost-cutting measures, including layoffs and a slowdown in expansion plans. However, it is yet to file financial statements for FY22 and FY23, leading to further investor dissatisfaction.
Regulatory issues, legal cases, and a potential debt crisis have added to BYJU’S challenges. The company recently stopped payments to its Term Loan B lenders and filed a lawsuit against one of them in the New York Supreme Court. Reports have also surfaced suggesting that brand ambassador Shah Rukh Khan may not renew his endorsement contract due to the company’s ongoing troubles.
Shareholders, including BlackRock and Prosus, have lowered the valuation of BYJU’S on their books. As the storm intensifies, the future remains uncertain for India’s most valuable startup.
