BYJU’s investors file oppression, mismanagement suit against co-founder Byju Raveendran, others

Also Read: BYJU’s epic rise and fall underscores the need for an EdTech regulator in India

The meeting

Investors, who are seeking the ouster of Raveendran and family from BYJU’s board at an extraordinary general meeting of shareholders for alleged “mismanagement and failures” at what was once India’s hottest tech startup, have also sought a forensic audit of the company in the plea filed before the National Company Law Tribunal (NCLT) on Thursday (22 February) evening, according to a court filing.

As per the filing, the investors have sought to declare the present management as unfit to run the company and appoint a new CEO and a new board.

The plea also wants a forensic audit and a direction to the management to share information with the investors.

Sources said the plea sought a declaration of the just-concluded $200 million rights offer as void and sought a direction that the company should not take any corporate actions that will prejudice the rights of the investors.

Also Read: ED upgrades look-out notice against BYJU’s founder Byju Raveendran

The petition

The petition has been signed by four investors — Prosus, GA, Sofina, and Peak XV — along with support from other shareholders, including Tiger and Owl Ventures.

The plea has been filed to prevent value erosion for all shareholders as well as preserve worth for other stakeholders — employees and customers.

Concerns raised in the suit included financial mismanagement by the founders leading to losing control of Aakash, BYJU’s Alpha (TLB loan) default and prolonged corporate governance issues, including the non-hiring of CFO and independent director.

Other concerns are about the “oppressive nature” of the rights offer, alleged regulatory non-compliances, “oppressive, opacity and wilful defaults” in sharing information with stakeholders and unauthorised corporate actions regarding the acquisition of Singaporean ed-tech company Northwest Education Pte.

The plea has also mentioned inter-corporate loans on undisclosed terms and multiple insolvency petitions filed by BCCI, TLB lenders and Surfer Technologies Pvt Ltd.

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