Investors Approach NCLT Alleging Domination And Malpractice by Byju’s
Investors Approach NCLT Alleging Domination And Malpractice by Byju’s
The application is yet to be registered and listed for hearing
Four investors EdTech Investments, a subsidiary of Prosus NV; General Atlantic Singapore; Peak XV Partners Operations LLC; and Sofina have approached the National Company Law Tribunal (NCLT) at Bengaluru against edu-tech start-up Byju's, alleging the company’s oppression and mismanagement.
The group sought a declaration that Byju Raveendran, the Founder and Chief Executive Officer, and the company’s management was unfit to run it and should be ousted from the organization. They stated that the 'rights issue' launched by the company early this month was void.
The rights issue was known to have involved a possible dilution in the shareholding of non-participating investors by 99 percent. However, Byju's claimed that the investors had already fully subscribed to the rights issue with its parent company Think and Learn Pvt Ltd.
On 22 February, on a related matter, the Karnataka High Court stayed the effect of the decisions that could be taken during an extraordinary general meeting (EGM) that was scheduled for the day after. It included Raveendran's possible ouster from the company.
However, Byju’s argued that the EGM of the shareholders was scheduled at the instance of the shareholders without following the procedure under the Companies Act, 2013. At the meeting, the shareholders had sought to reconstitute the company’s Board of Directors.
Meanwhile, the company’s lenders also appealed before the NCLT seeking the initiation of insolvency proceedings against Byju's.
The first petition was filed by Surfer Technologies, the digital marketing vendor; the second by Glas Trust Company LLC, an international lender, and the third by Teleperformance Business Services, a business process outsourcing (BPO) entity.
