BYJU's has declared the extraordinary general meeting (EGM) slated today as procedurally invalid, marking a significant development in the ongoing shareholder dispute who collectively hold 32% stake in the company.
In a statement released on Thursday, a spokesperson for BYJU's stated, "This EGM is procedurally invalid, contractually in contravention of our AOA and SHA, legally on the wrong side of the Companies Act, 2013."
The company further announced that founder Raveendran and other board members will refrain from attending the EGM. They asserted that even if the meeting is convened, it would lack the necessary quorum to discuss or vote on the agenda.
"As custodians of BYJU's, it is the responsibility of the Founders to respect the established procedures of law and protect the company's integrity," the statement emphasized.
This development comes ahead of a crucial vote wherein shareholders are expected to decide on a resolution aimed at removing founder CEO Byju Raveendran and his family members from their positions. Allegations of mismanagement and failures have spurred this move against the leadership.
However, the outcome of the EGM will remain pending until March 13, pending a hearing by the Karnataka High Court. The court recently declined to stay the EGM, which was called by a faction of shareholders.
The notice for the EGM seeks to oust the current board of Think & Learn, the company operating BYJU's, which includes Raveendran, his wife Divya Gokulnath, and his brother Riju Ravindran.
BYJU's has faced multiple challenges recently, including financial strains exacerbated by the pandemic's impact on the education sector and the acquisition of Aakash, which further burdened the company's finances.
To address investor concerns, Raveendran pledged greater transparency regarding fund utilization and proposed a board restructuring, including the appointment of two non-executive directors by mutual agreement.
Allegations listed in the EGM notice include financial mismanagement, failure to resolve legal issues, and delays in statutory payments and employee obligations.
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