Yahoo Finance Byju’s Investors Vote to Oust CEO from Troubled Startup
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Byju’s shareholders, including Prosus NV and Peak XV Partners, voted Friday to oust its founder as chief executive officer, escalating a battle over the fate of the once high-flying online tutoring startup that is fighting to remain in business.
Investors who attended an extraordinary general meeting unanimously passed all resolutions, which also sought to remove Byju Raveendran from the board of the company he founded in 2015, according to a Prosus spokesperson.
Byju’s rejected the resolutions and said the meeting was marred by procedural irregularities.
“The resolutions passed during the recently concluded extraordinary general meeting — attended by a small cohort of select shareholders — are invalid and ineffective,” the company said in a statement.
Peak did not immediately respond to a request for comment.
The vote sends another clear signal of displeasure with the once-celebrated entrepreneur, who boycotted the meeting. It’s an unusual twist in a long-running dispute between a company once counted among India’s most valuable startups, and a clutch of influential investors that helped bankroll its pre-Covid ascent.
The resolutions came after a rowdy hours-long Zoom call for investors and management on Friday that several Byju’s employees tried to crash, according to two people who attended. Several times during the meeting, unknown participants tried to disrupt the proceedings with whistles and other loud noises, the people said, asking not to be identified discussing a private call.
Online-education pioneer Byju’s and its creditors have been mired in a prolonged restructuring conflict after the firm missed an interest payment on a $1.2 billion loan. A unit of the company was put into bankruptcy in the US after the default.
Read More: Byju’s Unit Placed Into US Bankruptcy Over $1.2 Billion Default
Raveendran, whose ascent from tutor to the leader of a company once valued at $22 billion captivated a nation then enamored of charismatic tech entrepreneurs, is taking increasingly desperate measures to keep the business afloat after expanding too rapidly during the pandemic. Byju’s was caught off-balance after demand for online tutoring dropped off as schools reopened.
Some board members have resigned and Raveendran has pledged his home as well as those owned by his family members to raise money for employee salaries. It’s also selling new stock at a discount of more than 90% from its previous funding round to raise capital.
Raveendran’s company is one of several once-lionized tech startups that have grappling with financial or legal troubles. Paytm, the firm that popularized online finance across India, is struggling to address the abrupt suspension of a key division by the central bank.
--With assistance from Anto Antony.
(Updates with Prosus comment in second paragraph.)
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