ACTION PUNJAB NEWS Desk: In a dramatic turn of events, major shareholders of Byju’s, including Prosus NV and Peak XV Partners, voted on Friday to remove its founder as the chief executive officer, intensifying a power struggle within the online tutoring giant. Byju’s swiftly rejected the resolutions, which also aimed to remove Byju Raveendran from the board of directors, as announced in a statement on Friday.
“The resolutions passed during the recently concluded extraordinary general meeting – attended by a small cohort of select shareholders – are invalid and ineffective,” the company stated.
A spokesperson for Prosus declined to comment on the matter, while Peak XV Partners did not immediately respond to requests for comment. The shareholders’ move underscores a growing dissatisfaction with the once-revered entrepreneur, who notably boycotted the meeting. This development marks a significant escalation in the ongoing dispute between Byju’s, once considered one of India’s most valuable startups, and a group of influential investors pivotal to its pre-pandemic success.
The decision came after a tumultuous, hours-long Zoom call involving investors and management on Friday, during which several Byju’s employees attempted to disrupt the proceedings. According to sources present at the meeting, unidentified participants repeatedly interrupted with whistles and loud noises, creating a chaotic atmosphere.
Byju’s and its creditors have been embroiled in a protracted restructuring conflict following the company’s default on a $1.2 billion loan interest payment. A subsidiary of the firm was pushed into bankruptcy in the United States as a result of the default.
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Raveendran, once celebrated for his journey from tutor to the helm of a company valued at $22 billion, now faces mounting pressure to salvage the business, which expanded rapidly during the pandemic but struggled amid declining demand for online tutoring as schools reopened.
In a bid to stave off financial collapse, Raveendran has resorted to desperate measures, including offering his own and his family’s homes as collateral to secure funds for employee salaries. Additionally, Byju’s is selling new stock at a steep discount from its previous valuation to raise much-needed capital.
Byju’s is among several tech startups that have fallen from grace due to financial or legal challenges. Paytm, another once-lauded tech firm in India, is grappling with the sudden suspension of a key division by the central bank, adding to the sector’s woes.
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(Inputs from agencies)
