Byju’s investors seek founder’s ouster after heated general meeting

Byju’s office / Photo credit: Glassdoor

Byju’s, the troubled edtech giant, is facing a lawsuit filed by its own backers.

Four major investors – Prosus, GA, Sofina, and Peak XV – have filed a petition with India’s National Company Law Tribunal (NCLT) seeking to remove founder Byju Raveendran and his wife, Divya Gokulnath, from leadership positions in the firm due to alleged oppression and mismanagement.

According to media reports, the investors also want to void a recently announced fundraising effort. In January, Byju’s said it plans to raise US$200 million via rights issue, bringing its total valuation down to US$230 million – a significant drop from its all-time high of US$22 billion.

Byju’s loss of control over test prep subsidiary Aakash was also cited in the NCLT filing. In 2023, US-based investment fund Davidson Kempner Capital Management (DK) took control of Aakash and its accounts, reportedly accusing Byju’s of financial misconduct.

The NCLT petition was filed after Byju’s faced a showdown in a crucial extraordinary general meeting (EGM) called by a group of dissatisfied investors.

Media reports say that investors took charge as Byju’s leaders were absent from the gathering. The investors discussed financial mismanagement issues such as a US$1.2 billion loan default. They also brought up leadership failures and a lack of transparency with shareholders and in the company.

However, unknown people allegedly tried to sabotage the EGM through various means, including impersonating the India-based company’s investors. Byju’s management called the meeting “invalid” and had attempted to block it by suing the investors.

See also: Charting Byju’s 99% fall in valuation