India Breaking Buzz

Investors vs. Byju’s: K’taka HC prolongs stay on investor resolutions

<p>The Karnataka High Court on Wednesday prolonged its temporary injunction, which prevented Byju’s investors from implementing any of the resolutions adopted at the company’s Extraordinary General Meeting (EGM) last month, until March 28.</p>
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<p>Byju Raveendran, the company’s founder, is very relieved since, at the EGM convened by investors such as Prosus and General Atlantic, holders of more than 60% of the capital table voted in favor of a change in the company’s leadership.</p>
<p>Additionally, these investors sued Raveendran and the management at the Bengaluru branch of the National Company Law Tribunal (NCLT) for mismanagement and oppression.</p>
<p>The Karnataka High Court received a request from the Edtech company Byju’s last month asking for a stay on the results of the EGM that a few investors had called. In response to a petition filed by Byju’s parent company, Think & Learn Private Limited, the HC issued an order declaring that any resolutions scheduled for the EGM on February 23 would be deemed illegal until the petition’s final hearing and decision.</p>
<p>In a related development, the Board of Control for Cricket in India (BCCI) filed an insolvency case against the company, and the NCLT Bengaluru bench set a date for its next hearing on March 20.</p>
<p>Sources claim that Byju’s attorneys pushed for arbitration of the dispute.</p>
<p>According to sources, they also contended that the current debt (Rs 158 crore) cannot be classified as an operating debt since the BCCI did not provide any services after the contract concluded.</p>
<p>Meanwhile, Think and Learn and Aakash Educational Services withdrew their merger proposal at Tuesday’s NCLT session. “The petition to withdraw the merger approval was a preplanned and mutually agreed process,” a Byju official said. Under the Think and Learn name, both businesses have operated separately and will continue to do so. Tuesday at NCLT was a procedural day to finish the necessary paperwork.</p>
<p>In 2021, Byju’s paid around $950 million in cash and equity to purchase Aakash. In order to pay off its debt to Davidson Kempner, the family office of Manipal Education and Medical Group Chairman Ranjan Pai recently invested Rs 1,400 crore in Aakash.</p>
<p>Aakash and Great Learning, two of Byju’s subsidiaries, have both been doing well; in the months after purchase, they expanded by 40% and 77%, respectively. In mid-2024, Byju’s had said last year that it will initiate the Aakash IPO.</p>
<p>Low morale among Byju’s workers, they search for work</p>

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