A group of about six investors in Think and Learn Private Limited, the company behind BYJU's brand, have initiated an extraordinary general meeting (EGM) to address concerns within the edtech major and seek the removal of founders' control over the company, according to sources familiar with the matter.
Led by Dutch investment firm Prosus, the investors issuing the EGM notice aim to address outstanding governance, financial mismanagement, and compliance issues. They also call for a reconstitution of the Board of Directors to eliminate founder control and a change in the company's leadership.
The notice sent to shareholders outlines the resolutions proposed for the EGM, emphasising the need to resolve governance and financial issues and shift control away from the founders. Notably, the group of investors comprises General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, collectively holding approximately a 30 percent stake in BYJU's.
"The resolutions being put forward for the EGM to consider include a request for the resolution of the outstanding governance, financial mismanagement and compliance issues, the reconstitution of the Board of Directors so that it is no longer controlled by the founders of T&L and a change in leadership of the Company," the notice said.
According to sources, a consortium of BYJU's shareholders had previously requested board meetings in July and December to discuss these matters, but those requests were reportedly disregarded by the company.
BYJU's has not yet responded to queries regarding this development.
Bankruptcy proceedings
A US subsidiary of Byju's has filed for Chapter 11 bankruptcy proceedings in the US court of Delaware. In the court filing, the unit listed its liabilities in the range of $1 billion to $10 billion, while its assets were reported in the range of $500 million to $1 billion.
Byju's has faced various challenges, including the initiation of bankruptcy proceedings by a group of lenders. Additionally, the startup has been in negotiations for the repayment of a $1.2 billion term loan over the past few months. These setbacks have contributed to the filing for Chapter 11 bankruptcy by its US unit.
(With PTI inputs)
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