Byju’s Secures Temporary Legal Shield Amidst Turmoil

Byju's Secures Temporary Legal Shield

VoM News Desk | February 22, 2024 | 09:41 AM IST | Breaking News | Follow on Google News

Byju’s Secures Temporary Legal Shield Amidst Turmoil

Byju’s Secures Temporary Legal Shield Amidst Turmoil

Ed-tech giant Byju’s has obtained temporary legal protection as it faces resistance from a group of shareholders attempting to oust its billionaire founder, CEO Byju Raveendran. Once a standout among India’s startups, Byju’s experienced a sharp decline, with its valuation plummeting by approximately 90% in the past year, reaching a valuation of over $20 billion at its peak.

Challenges and Setbacks: Byju’s Struggles

Byju’s encountered a series of challenges, including the departure of key investors and crises such as the resignation of its auditor Deloitte. The legal disputes extended to a confrontation with US lenders regarding a $1.2 billion loan. Amidst these struggles, a group of shareholders, including tech investor Prosus, called for an extraordinary general meeting (EGM) on February 23 to replace Raveendran and appoint a new board.

Legal Reprieve: Karnataka High Court’s Intervention

Byju’s revealed that the Karnataka High Court has issued an interim order declaring any decisions made at the EGM as “invalid” until the next hearing. The court order is seen by Byju’s as crucial protection against what they describe as an attempt to disrupt the company’s management and functioning. However, investor sources indicated that the court order doesn’t prevent the EGM from proceeding, and efforts to remove Raveendran as CEO are likely to continue.

Allegations of Violations: Byju’s Counters Shareholders’ Move

Byju’s has countered the shareholder group’s move by alleging that investors, including General Atlantic and the Chan Zuckerberg Initiative, violated the shareholders’ agreement by calling the EGM. Representatives of Prosus and the Chan Zuckerberg Initiative had stepped down from the Byju’s board in the previous year. The legal battle unfolds against the backdrop of Byju’s striving to regain stability amid its recent challenges.

VoM News Desk

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