Investor Revolt against Byju's: NCLT Petition Challenges Management, Rights Issue
Edu-tech giant Byju's is facing a multi-pronged legal challenge with four investors and multiple lenders approaching the
Investor Revolt against Byju's: NCLT Petition Challenges Management, Rights Issue
Edu-tech giant Byju's is facing a multi-pronged legal challenge with four investors and multiple lenders approaching the National Company Law Tribunal (NCLT) and courts.
A group of four investors, including EdTech Investments (a subsidiary of Prosus NV), General Atlantic Singapore, Peak XV Partners Operations LLC, and Sofina, have filed an application before the NCLT in Bengaluru against Byju's. They allege oppression and mismanagement by the company and its leadership, specifically Byju Raveendran, the founder and CEO.
The investors seek a declaration from the NCLT that Byju Raveendran and the current management are unfit to run the company and should be ousted. They also challenge the validity of the recent “rights issue” launched by Byju's, arguing that it might dilute their shareholding without their consent.
Byju's has reportedly claimed that the investors fully subscribed to the rights issue through Think and Learn Pvt Ltd, the parent company. The company previously challenged the legality of an extraordinary general meeting (EGM) scheduled by its shareholders, which aimed to reconstitute the board of directors, including potentially removing Raveendran. The Karnataka High Court temporarily stayed any decisions from this EGM.
Adding to Byju's troubles, multiple lenders have also filed applications with the NCLT seeking initiation# of insolvency proceedings. These petitions, filed by entities like Surfer Technologies, Glas Trust Company LLC, and Teleperformance Business Services, highlight the company's potential financial difficulties.