EXCLUSIVE: From Dubai, Raveendran dubs Byju’s EGM as Invalid & Illegal

TICE Exclusive: ED has issued a Look Out Notice for Byju Raveendran. Is he missing? TICE sources confirm the founder is in Dubai. The edtech founder decides not to attend the EGM. Calls in invalid and illegal. Read more in the article.

Swati Dayal
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Byju in Dubai

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The most sought-after Edtech Founder Byju Raveendran is sitting in Dubai. The much-awaited clarification regarding the whereabouts of Byju's founder and group CEO has finally arrived, dismissing claims of his disappearance following an Enforcement Directorate (ED) lookout notice. TICE exclusively reached out to sources close to Byju Raveendran, dismissing claims of his disappearance following an Enforcement Directorate (ED) lookout notice.

"He is in Dubai," the source, on condition of anonymity, tells TICE News.

While media has been buzzing with news of the ED's lookout notice, the source informed TICE that the notice is not new but has been renewed a month ago.

ANI reported that the ED has urged the Bureau of Immigration to issue the notice to prevent Raveendran from leaving India. The source also clarified that the ED notice sent to Byju earlier this month did not restrict Byju Raveendran from traveling abroad.

The much-anticipated controversial EGM is scheduled to take place on February 23, 2023 as the Kartanaka High Curt refused to halt the meeting called by the shareholders. The ECM is being held virtually.

BYJU'S Founder Raveendran and Team Boycott EGM, Citing Procedural and Legal Violations

The situation remains tense for Byju, Riju Raveendran, and Divya Gokulnath despite the Karnataka High Court granting relief to BYJU'S, declaring that any resolutions passed in the EGM by select investors on February 23 will be invalid until the final hearing and disposition of the petition are completed.

BYJU'S spokesperson has confirmed to TICE News that Raveendran and his team will not be present at the Extraordinary General Meeting (EGM) scheduled for Friday, February 23, 2024. The spokesperson asserted that the EGM is deemed procedurally invalid, in contractual contravention of the Articles of Association (AOA) and Shareholders' Agreement (SHA), and legally on the wrong side of the Companies Act, 2013. Consequently, Byju Raveendran and any other Board member will refrain from attending this invalid EGM. This decision implies that, should the EGM still be summoned, it will lack the necessary quorum to proceed with the discussion or voting on the agenda. The spokesperson emphasized the founders' responsibility to uphold established legal procedures and safeguard the integrity of BYJU'S as custodians of the company.

Extraordinary General Meeting Sparks Leadership Change Debate

In a week filled with chaos and fiasco, a group of select investors has called for an Extraordinary General Meeting (EGM) scheduled for February 23, 2024. The primary agenda of this meeting is to vote for the removal of Byju Raveendran as the Group CEO. Significantly, the investors have already put a new board in place just two days before the EGM.

Also Read: Byju's Has A New Board Now: Is It End of the Road for Raveendran?

Byjus statement

Why Byju's Shareholders Demand Change!

The EGM notice outlines seven agendas, with the key focus on removing Byju Raveendran as the managing director and CEO, along with Divya Gokulnath and Riju Raveendran from their respective roles and directorships. The coalition of shareholders, representing over 30% of the company's shares, includes major investors such as Prosus, General Atlantic, Peak XV, Sofina, Chan Zuckerberg Initiative, Owl Ventures, and Sand Capital Management. The move comes amidst concerns about financial mismanagement and transparency within BYJU's.

Proposed Interim Leadership and Board Restructuring at Byju's

The EGM notice proposes the appointment of an interim CEO to replace Byju Raveendran while engaging a search firm to identify a permanent CEO. Furthermore, it suggests a restructuring of the board, expanding it to nine members, including one founder, two executives from within the group companies, three shareholders, and three independent directors. The new Board of Directors is expected to be appointed in a subsequent meeting within thirty days from the EGM.

Karnataka High Court Grants Relief to BYJU'S

In a significant turn of events, the Karnataka High Court granted relief to BYJU'S, declaring any resolutions passed in the EGM by select investors on February 23 as invalid until the final hearing and disposition of the petition. BYJU'S filed the petition under Section 9 of The Arbitration and Conciliation Act, 1996, accusing certain investors of violating Articles of Association, Shareholders' Agreement, and the Companies Act, 2013, by calling for the EGM.

BYJU’S filed the petition under Section 9 of The Arbitration and Conciliation Act, 1996, arguing that certain investors, including General Atlantic, Chan Zuckerberg Initiative, MIH EdTech Investments, Own Ventures, Peak XV Partners (formerly Sequoia Capital India & SEA), SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, Sofina, and T. Rowe Price Associates, had violated the Articles of Association (AoA), the Shareholders’ Agreement (SHA), and the Companies Act, 2013 by calling for an EGM on 23 February 2024. BYJU’S presented compelling evidence and multiple exhibits to support its case, seeking to prevent these investors from disrupting the company's operations by depriving it of urgently needed capital.

BYJU'S Response and Commitment

In its petition,  BYJU’s highlighted that the purported reasons for the EGM, including the removal of Byju Raveendran as CEO and Chairman, as well as Divya Gokulnath and Riju Raveendran as Directors, were merely a smokescreen designed to disrupt the management, control, and functioning of the company. The company firmly argued that the proposed EGM was vexacious and devoid of merit, put forward to disrupt the ongoing rights issue which offers all shareholders an equal opportunity to maintain their shareholding in the Company via participation. BYJU’S emphasized its commitment to providing fair and equal opportunities for all shareholders to participate in the rights issue.

The ruling ensures that the company can continue its operations with stability and focus, safeguarding the interests of all stakeholders.

The company remains confident in its ability to navigate the current challenges and thanks all its shareholders for their overwhelming participation in the ongoing rights issue.

Watch The Video: Breaking Down Byju's: The Shocking Truth Behind Credibility Meltdown!

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