Think & Learn Pvt Ltd (TLPL), the parent of Byju’s, has said investors have no voting rights on changing the chief executive officer (CEO) of the firm.
The edtech company responded to statements from select investors calling for an extraordinary general meeting (EGM) to replace founder and group CEO Byju Raveendran.
“Under these unfortunate circumstances, we would emphasise that the shareholder’s agreement does not give them the right to vote on CEO or management change,” said the company in a statement on Friday.
A consortium of key shareholders on Thursday issued a notice to the firm, calling for an EGM to address “persistent issues”. These shareholders will vote in an attempt to alter the company’s board. This includes asking Raveendran to step down, sources said.
The demand comes as the company is in the midst of raising $200 million through a rights issue.
Shareholders have been told why this is critical, said the company.
“Unfortunately, the company and our employees are paying the price for a stand-off triggered by some investors. Business continuity is essential, and we shall prioritise this in our actions,” said the firm.
In three short days, since launching the rights issue, the firm said it had received commitments on getting more than 100 per cent of the amount. This will take 25 more days to complete. “It will ensure we have enough growth capital, and also to meet all operational liabilities,” said the company.
Meanwhile, the crisis has affected employees, whose salary for January has been delayed. The firm in an email to employees blamed investors for this. “There is a slight delay in salary disbursement this month because of the artificially induced crisis by these select investors,” it said.
“As many of you know, ‘Byju sir’ (Raveendran) has personally shouldered the responsibility of paying our salaries over the past several months, including pledging his only home to ensure our financial security. This month is no different. Our salaries, let us reassure you, will be paid in a phased manner starting today (Friday) and will be completed by Monday.”
The company said Raveendran and his leadership team had kept TLPL afloat after three investors left the company’s board last year, triggering a broader crisis. The company, along with the advisory board consisting of Rajnish Kumar, former State Bank of India chief, and Mohandas Pai, former chief financial officer of Infosys, constituted a working group with the investors to find a way forward.
The company and its leadership have updated the working group on all crucial matters, including the ongoing business restructuring, the financial position, and audits. TLPL has said it has been turning around the business, cutting the monthly burn to near operational breakeven and working on an artificial intelligence-led technological refresh soon.
In a letter to the shareholders and the employees by the management of Byju’s, including CEO (India operations) Arjun Mohan, the company expressed unequivocal support for Raveendran.
“The fact that Byju Raveendran has brought in a sum of over $1.1 billion into the company over the last year without looking at an exit is testimony to his confidence and commitment to Byju’s story,” said the letter, a copy of which Business Standard has reviewed.
If Byju’s raises $200 million, its post-money valuation will be $230-250 million, a 99 per cent drop from the $22 billion valuation the firm had in 2022, according to sources.
Source: Business Standard
