News Update

Investors of Byju’s file NCLT petition citing oppression and mismanagement

• ByStartupStory     |    February 23, 2024

A consortium of four investors of Byju’s, including Prosus, GA, Sofina, and Peak XV, have submitted a petition to the National Company Law Tribunal (NCLT) in Bengaluru, alleging oppression and mismanagement by the edtech giant. The petition aims to declare the founders unfit to run the company and seeks the appointment of a new board, among other reliefs, according to sources familiar with the matter.

Concerns raised in the NCLT suit encompass various issues such as financial mismanagement leading to the loss of control over Aakash, default on Byju’s Alpha (TLB loan), prolonged corporate governance issues including the absence of a CFO and independent director, and the oppressive nature of the recent $200-million rights offer.

The petition has garnered support from other shareholders, including Tiger and Owl Ventures, and calls for the declaration of the recently concluded rights offer as void. It also demands that the company refrains from taking any corporate actions that could prejudice investor rights.

Additionally, the plea highlights undisclosed terms of inter-corporate loans and multiple insolvency petitions filed against the company by entities such as BCCI, TLB lenders, and Surfer Technologies Pvt Ltd.

In response to the development, a spokesperson for Byju’s stated, “The company has not received any formal intimation of any such petition being filed in the NCLT. It cannot comment on rumours on the same… If such a petition has been filed, the company shall respond to the same as per Applicable Law and due process.”

The filing of the petition coincides with ongoing extraordinary general meetings (EGM) conducted by a group of investors. Allegations have surfaced that the virtual EGM was disrupted by employees of Byju’s at its commencement.

Raveendran and his family members have opted out of attending the EGM, labeling it as ‘invalid’ amidst escalating tensions within the company.

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