‘Oppression and mismanagement’ suit filed by Byju's investors against Raveendran, others
Concerns raised in the suit included financial mismanagement by the founders leading to losing control of Aakash, Byju's Alpha loan default, and prolonged corporate governance issues
A group of four investors of Byju's has filed an oppression and mismanagement suit against the management of the company before the Bengaluru bench of the NCLT, seeking declaring of founders, including CEO Byju Raveendran, as unfit to run the company, and appointing a new board.
Besides, the suit has sought declaring the just-concluded rights issue as void.
Investors, who are seeking the ouster of Raveendran and family from Byju's board at an extraordinary general meeting of shareholders for alleged "mismanagement and failures" at what was once India's hottest tech startup, have also sought a forensic audit of the company in the plea filed before the National Company Law Tribunal (NCLT) on Thursday evening (February 22), according to a court filing.
New CEO sought
As per the filing, the investors have sought declaring the present management as unfit to run the company and appointing of a new CEO and a new board.
The plea also wants a forensic audit and a direction to the management to share information with the investors.
Sources said the plea seeks declaration of the just-concluded USD 200 million rights offer as void and sought a direction that the company should not take any corporate actions that will prejudice the rights of the investors.
The petition has been signed by four investors - Prosus, GA, Sofina, and Peak XV - along with support from other shareholders, including Tiger and Owl Ventures.
'Prevent value erosion'
The plea has been filed to prevent value erosion for all shareholders as well as preserve worth for other stakeholders - employees and customers.
Concerns raised in the suit included financial mismanagement by the founders leading to losing control of Aakash, Byju’s Alpha (TLB loan) default, and prolonged corporate governance issues, including non-hiring of CFO and independent director.
Other concerns are about the "oppressive nature" of the rights offer, alleged regulatory non-compliances, "oppressive, opacity, and wilful defaults" in sharing information with stakeholders and unauthorised corporate actions regarding acquisition of Singaporean edtech company Northwest Education Pte.
The plea has also mentioned about inter-corporate loans on undisclosed terms and multiple insolvency petitions filed by BCCI, TLB lenders, and Surfer Technologies Pvt Ltd.
(With agency inputs)
