Byju Raveendran, the founder of Edtech company Byju’s, received temporary relief from the Karnataka High Court on Wednesday, as the Court halted any decisions that could potentially occur during the upcoming extraordinary general meeting (EGM) scheduled for February 23 [Think and Learn Pvt Ltd v. Chan Zuckerberg Mauritius & Ors]. This ruling serves to safeguard Raveendran from potential removal from the company, as the EGM was convened by significant investors/shareholders of Byju’s, such as Chan Zuckerberg Initiative, General Atlantic, Prosus Ventures, and Peak XV, to deliberate on a leadership change within the company.
Shareholders purportedly seek to remove the current leadership, including Raveendran, and revamp the board while addressing financial management issues.
The investors initiated an EGM for February 23 by issuing a notice under section 100(3) of the Companies Act, prompting Byju’s to seek recourse from the Court.
Justice Anant Ramanath Hegde, acting as the single judge, preliminarily noted that the prerequisites for convening the EGM had not been met. Consequently, the Court issued the interim stay order.
“The conditions for convening an EGM are not complied and no notice is issued as contemplated under Section 100(3) of the Companies Act. Considering the submissions made and perusal of the records, this Court is of the view that the interim order is required to be passed. The decision, if any taken by the shareholders of Byju’s in EGM scheduled on February 23 shall not be given effect till the next date of hearing,” the Court said.
Byju’s argued that the EGM of the shareholders was scheduled at the instance of the shareholders without following the procedure under Companies Act.
The company argued that conditions for convening the EGM including issuance of notice were not complied with.
The Court agreed with the submissions and granted interim relief.
The case will be heard next on March 13.
Think and Learn Private Limited, which owns and runs Byju’s, was represented by advocates KG Raghavan, Dhyan Chinappa and Dr Rishab Gupta who were briefed by Manmeet Singh and Sairam Subramanian from Saraf and Partners.
In the interim, creditors of the company have also submitted petitions to the National Company Law Tribunal (NCLT) requesting the commencement of insolvency proceedings against Byju’s.
The initial application was filed by digital marketing vendor Surfer Technologies and was heard by NCLT Bengaluru on February 6. Subsequent petitions were presented by international lender Glas Trust Company LLC and business process outsourcing (BPO) entity Teleperformance Business Services, with the latter being heard on February 8.
