A shareholder attempt to oust Byju Raveendran, founder and CEO of Indian edtech giant Byju’s, has been declared invalid after neither Raveendran nor other company founders attended the extraordinary general meeting (EGM) called for the vote.
Founders
Major Byju’s shareholders, including Prosus and PeakXV Partners, convened an EGM on February 17th seeking to remove Raveendran from his leadership role along with making additional board and governance changes.
However, Byju’s Articles of Association mandate that at least one founder-director must be present to establish a valid quorum for shareholder resolutions. With Raveendran and other founders absent, the EGM lacked legitimate standing to enact binding decisions.
Byju’s asserts that without a proper quorum in place, all resolutions passed during the meeting are considered null and void. This places the validity of the shareholder vote on uncertain legal ground until further court clarification.
Investor Support
Despite the disputed technical legitimacy of the EGM itself, shareholder advocacy for management changes at Byju’s remains high.
Prosus and other key investors maintain that unanimous shareholder support was demonstrated at the meeting for installing a revamped board and leadership team. Over two dozen funds and stakeholders reportedly attended.
As 9.6% owner, Prosus retains strong interest in realigning Byju’s corporate governance with shareholder priorities. Its accompanying statement upheld confidence in the necessity and backing for the proposed organizational shakeup.
Court Review
Byju’s leadership recently petitioned the Karnataka High Court to intervene on whether the EGM lacked appropriate procedural grounds. The court has said any shareholder resolutions passed will stay ineffective pending further arguments on March 13th.
In the interim, Byju’s appears set to stand behind its founder-director attendance requirement for binding votes. Investors seem equally adamant that majority shareholder sentiment favors current management removal.
The ultimate fate of Raveendran’s leadership hangs in the balance awaiting the court’s guidance on proper adherence to quorum principles. If the EGM’s status holds, dramatic transitions atop India’s highest-valued startup could soon transpire.
Founder-Led Growth Tempered
Raveendran has led Byju’s ascension into India’s preeminent online education provider on the back of his charismatic and visionary founding leadership. However, the company has hit recent roadblocks stemming from overexpansion, missed targets, and weakened financials.
Raveendran championed Byju’s accelerated growth strategy through billions in funding rounds and global acquisition sprees. But resultant organizational complexity has created disconnects between the founder-led ethos and investor accountability priorities.
