Byju’s Shareholders Want Founder/CEO Byju Raveendran To Leave Company! Find Out Why?
At an extraordinary general meeting (EGM), concerned shareholders of the edtech giant Byju’s raised serious questions regarding the utilization of funds and demanded the removal of founder and CEO Byju Raveendran. The EGM was convened in response to the exit of the company’s long-time auditor and three external directors, which triggered shareholder concerns and demands for transparency.
During the meeting, shareholders confronted the leadership team about the disclosure of pro-forma financials, particularly regarding the $910 million from the $1.2 billion raised through Term Loan B (TLB). The status of these funds was not clear in the company’s books of accounts, prompting shareholders to seek clarification.
Last month, Deloitte Haskins and Sells Llp, the auditors of Byju’s for the past six years, resigned, citing a lack of response to their inquiries. Additionally, three non-promoter board members representing prominent investors, namely Peak XV (formerly Sequoia India), Chan Zuckerberg Initiative, and Prosus, also resigned in June. Following these departures, only Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran remained as board members.
Although some shareholders called for Raveendran’s ouster and the appointment of an interim CEO, Byju’s denied any discussion of a CEO change during the EGM. The company emphasized that the meeting focused on topics such as the closure of audits, board reconstitution, process strengthening, and the upcoming Aakash IPO.
Investors of Think & Learn Pvt. Ltd, the entity operating Byju’s, raised concerns about the utilization of funds raised through a $1.2 billion TLB in 2021. They expressed dissatisfaction over the lack of monthly management information system (MIS) reports, which are crucial for tracking the company’s financial performance. Byju’s responded by stating that the raised capital is intended for acquisitions and conveyed this information to bondholders and shareholders, while citing limitations on disclosing further details at the moment.
Among the individuals who have left the company, one mentioned that some shareholders suggested Raveendran temporarily step down from the board until there is clarity on the financials for the last two years (FY22 and FY23) and the ongoing court cases. However, due to differing opinions among investors and the significant stake held by Raveendran’s family, a decision regarding his position could not be reached.
It remains to be seen how Byju’s will address the concerns raised by shareholders and provide the necessary transparency and accountability regarding the utilization of funds and the company’s financial performance. The outcome of this situation will shape the future of Byju’s and its leadership.
