Karnataka High Court grants interim relief to Byju Founder
Byju Raveendran, the founder of Edtech giant Byju's, secured temporary relief from the Karnataka High Court on Wednesday
Karnataka High Court grants interim relief to Byju Founder
Byju Raveendran, the founder of Edtech giant Byju's, secured temporary relief from the Karnataka High Court on Wednesday, effectively shielding him from a potential ouster at the upcoming extraordinary general meeting (EGM) of the company's shareholders.
The EGM, scheduled for February 23, was called by key investors including Chan Zuckerberg Initiative, General Atlantic, Prosus Ventures, and Peak XV. These investors reportedly sought to discuss and potentially enact changes to the company's leadership, including the possible removal of Raveendran and the reconstitution of the Board.
In response to Byju's legal challenge, Justice Anant Ramanath Hegde of the Karnataka High Court observed that the conditions for convening the EGM, as per Section 100(3) of the Companies Act, may not have been adequately followed. This included potential issues with the notice issued to shareholders.
Considering these concerns, the Court granted an interim stay order, effectively preventing any decisions made at the EGM from being implemented until the next hearing, scheduled for March 13.
During the hearing, Byju's argued that the EGM was called without following proper procedures under the Companies Act and that the notice issued to shareholders was not compliant with the required format. The Court agreed with these arguments and granted interim relief.
Think and Learn Private Limited, the owner and operator of Byju's, was represented by advocates KG Raghavan, Dhyan Chinappa, and Dr. Rishab Gupta, who were briefed by Manmeet Singh and Sairam Subramanian from Saraf and Partners.
Meanwhile, separate insolvency proceedings against Byju's have been initiated by lenders, with applications filed before the National Company Law Tribunal (NCLT) by digital marketing vendor Surfer Technologies, international lender Glas Trust Company LLC, and Business Process Outsourcing (BPO) entity Teleperformance Business Services.
The Court's decision provides temporary relief for Raveendran and Byju's leadership, but the legal battle and potential for a leadership change remain unresolved until the next hearing in March. Additionally, the company faces ongoing challenges related to its financial management and the actions initiated by its lenders.