In anticipation of the extraordinary general meeting (EGM) scheduled for Friday, tensions swirl around Byju Raveendran, the CEO of Byju’s, as a group of investors seeks his removal and proposes board changes.
However, Raveendran has reassured shareholders that the $200 million rights issue has garnered full subscription, and has assured he is taking further steps to ensure transparency on the usage of the funds.
Raveendran’s stance also includes a pledge to restructure the Board, aiming to enhance shareholder representation.
He intends to appoint two non-executive directors after the FY23 Audit, fostering greater engagement between stakeholders and the company.
The move, he asserts, serves the company’s best interests and aligns with shareholders’ concerns, as communicated in a letter dispatched to shareholders around midnight.
Moreover, in a bid to uphold transparency, Byju’s plans to engage a third-party agency to oversee the allocation of funds raised through the rights issue.
The agency will provide quarterly reports to shareholders within 45 days of each quarter’s end, accompanied by insights from the Board, ensuring stakeholders are kept abreast of financial developments.
Raveendran stated he remains steadfast in his commitment to Byju’s vision despite challenges, dismissing detractors as “vested interests” attempting to disrupt the company amid financial strain.
He simultaneously asserted his focus on collective progress, emphasizing the significance of the investment in shaping the company’s future success and expressing gratitude to shareholders for their support.
Little Hope
However, underlying tensions persist as the investor group pushing for leadership change continues its efforts, despite assertions from Byju’s that they hold no voting rights.
This standoff has raised concerns about the company’s stability under current leadership, prompting apprehension among stakeholders about the direction of Byju’s and the composition of its board – The composition of Byju’s leadership and advisory council, including key figures like Raveendran’s wife Divya Gokulnath and former State Bank of India chairman Rajnish Kumar.
Stressing the complexity of the situation with the departure of representatives from major investors like Prosus and Peak XV, the board’s dynamics have shifted, contributing to the current atmosphere of uncertainty.
As the EGM looms, Byju’s is at a crossroads, facing headwinds while striving to maintain shareholder trust and chart a path forward in the middle of shifting investor sentiments.
Hence, the decisions made in the coming days will be closely watched as they will undoubtedly shape the direction of India’s leading tech companies once upon a time, with implications reaching far beyond its boardroom.
Byju’s Edtech Giant Shrinks Office Space To Meet Financial Challenges
Facing financial difficulties, Byju’s has also downsized its office footprint in Bengaluru, relinquishing a 400,000 square foot property at Prestige Tech Park in a bid to reduce expenses.
Earlier this year, the lease agreement for the space was terminated, and the deposit was utilized to cover outstanding rental dues. However, Byju’s is said to be entangled in disputes with other landlords.
Operated by Think and Learn, Byju’s had been incurring a monthly expense of approximately Rs 4 crore for the Bengaluru office space, having entered into the lease agreement with Prestige Group roughly 3.5 years ago.
Reports suggest that Byju has received legal notice from Kalyani Developers for non-payment of rent concerning a 500,000-square-foot office space at Kalyani Tech Park, Bengaluru, which remains under lock-in until March 2025.
An informed individual disclosed to the news outlet, “The outstanding amount owed to the builder (Kalyani Developers) stands at ten months, out of which they have offset seven months’ rent with the deposit.”
The accumulated dues towards Kalyani Developers include a total of ten months’ rent, with seven months’ worth being adjusted using the deposit.
Byju previously vacated a 400,000-square-foot office at IBC Knowledge Park and relocated its operations from Kalyani Tech Park between 2022 and 2023.
Asset Management
Although Byju’s retains ownership of these properties, they currently remain unoccupied.
Juggy Marwaha, CEO of Prestige Office Ventures, confirmed the termination of the lease in January, indicating the edtech’s financial woes as due to outstanding payments, the space was ultimately reclaimed by Prestige.
