Byju's EGM: 'No objection to resolution'; miffed investors await scrutiniser's report

New Delhi, Mar 29 (PTI) Shareholders of edtech major Think and Learn, owner of Byju's brand, on Friday, did not object to the firm's resolution to increase its authorised share capital at its extraordinary general meeting to pave the way to absorb the recently raised USD 200 million through rights issue, as per the company sources.

None of the miffed investors, who proposed to oust Byju's founder and family from the management seat, took part in the meeting, they added.

However, sources from the investors' side said their authorised representatives participated in the meeting, and the voting option is still open through postal ballot till April 6, after which the final result will be known through the scrutinisers' report.

"The meeting started at 10 am with approximately 20 investors' representatives in attendance, along with Think and Learn management. The requisite quorum required for EGM was there. A few questions regarding the postal ballot were asked and answered by the chairman and CS (company secretary). Resolutions were called out. No objections (were) raised," sources said.

Byju's called the EGM (extraordinary general meeting) to get shareholders' approval to increase the authorised share capital to enable the company to complete the exercise of the USD 200 million fundraising through the rights issue.

In February, the embattled edtech firm raised USD 200 million to meet its operational requirements, especially expenses related to employee salaries. However, it cannot issue additional equity to subscribers of the rights issue unless the authorised capital is increased.

A group of four investors -- Prosus, General Atlantic, Sofina, and Peak XV -- along with support from other shareholders, including Tiger and Owl Ventures, have approached the National Company Law Tribunal (NCLT) against Byju's EGM.

The six investors jointly hold a 32 per cent stake in the company.

"Meeting ended at 10:30 am. Further details on the voting and culmination of the Rights Issue will be shared later, post scrutiniser's report. Contrary to media reports, none of the miffed investors attended the EGM personally to raise any of their concerns," a Byju's source said.

A source from the investor side contested the claim and said that the authorised representatives of all investors attended the EGM.

"Nobody boycotted it. People can vote either at EGM or postal so we will not know the result until after April 6," the source said.

The option to vote on the Byju's resolution through postal ballot will close on April 6.

Byju's, which touched a peak valuation of USD 22 billion in March 2022, had announced a raising of USD 200 million through a rights issue at a 99 per cent lower valuation.

In the meantime, Byju's miffed investors called EGM on February 23 to oust its founder CEO Byju Raveendran and his family members over "mismanagement and failures".

After the EGM, four investors of Byju's filed an oppression and mismanagement suit against the company before the Bengaluru bench of the NCLT, seeking to declare the founders as unfit to run the company and appointing a new board.

Besides, the suit also sought to declare the rights issue to raise USD 200 million as void.

Raveendran and family own about 26 per cent of the company.

Byju's approached the Karnataka High Court against an investor's EGM. The court refused to grant a stay on the investor's EGM but gave interim relief to the edtech firm that any resolution passed at that EGM cannot be implemented before the next court hearing.

The last hearing in the case was scheduled on March 28 and the next hearing will come up after two months.

In the meantime, the NCLT Bengaluru bench also refused to stay Byju's EGM called for increasing authorised share capital and the next date for hearing in the matter is due on April 4. PTI