Rama Krishna Sangem
Finally, Byju’s, India’s biggest Education Technology company, has agreed to set right is corporate governance. Once hailed as poster boy of Edu Tech startups of India, this 22 billion US dollar valued giant is accused of bad corporate governance and financial mismanagement. A stage has come most of its investors have either left or threatened action against Byju, led by CEO Byju Raveendran.
Byju Raveendran, CEO and founder of the eponymous edtech giant, has told shareholders that the company will set up a board advisory committee (BAC). This was part of a discussion on July 4 with shareholders at an emergency general meeting (EGM).
Raveendran also said that in the next EGM in three weeks will give details about BAC’s members and composition. With rising troubles at Byju’s investors and shareholders have are getting anxious. The EGM was being called to discuss issues like Aakash IPO timeline, Audit timeline, TLB resolution, and fund-raising.
Group of Independent Directors
“The BAC will serve as a working group consisting of independent directors with credible backgrounds and relevant experience from diverse corporate fields. Its primary purpose will be to provide advice and guidance to the CEO on matters pertaining to the composition of the board and the governance structure suitable for a company of Byju’s scale, size, and performance aspirations,” said a source close to the development
Byju’s management told shareholders that negotiations continue with lenders for Term Loan B and are expected to have a favourable outcome. “The CEO stated that active and constructive discussions have taken place, and there are reasons to be optimistic about a mutually acceptable resolution. He emphasized that both parties involved in the issue are motivated to avoid legal proceedings and seek a resolution that benefits all involved parties,” said another source.
Denies demands for Raveendran’s removal
Separately, a company spokesperson said reports of Raveendran being asked to step down or withdraw from daily operations were not true. “I can confirm that at the EGM, there was no discussion on potential CEO change. This topic never came up and was not on the EGM agenda” said Saurabh Gupta, managing partner at DST Global.
Ajay Goel, chief financial officer at Byju’s, who was also on the call with shareholders, said that an audit of some group subsidiaries was completed for FY22. The audit for Aakash, WhiteHat Jr, and Think & Learn is currently underway, with the aim of optimizing the timelines. “The management reiterated the timeline for the completion of the FY22 audit is the end of September, while the FY23 audit is expected to be concluded by the end of December,” said the source.
This is the second shareholder meeting that the company has had to call in recent times. On June 24, Raveendran and Goel and group general counsel Roshan Thomas held a virtual meeting with shareholders after auditor Deloitte and three board members resigned.
According to PrivateCircle data, Raveendran along with Divya Gokulnath and Riju Ravindran now hold a 21.2 per cent stake in Think & Learn, the holding company.
Last month, after Deloitte resigned from the post of statutory auditor and with three board members representing Peak XV PArtners, Prosus and Chang Zukerberg Initiative stepping down, raised questions on the future of Byju’s. Along with it the tussle Byju’s is having with its lenders in the US has made shareholders and investors concerned.
