Byju Raveendran holds EGM amid crisis, proposes setting up Board Advisory Committee
Byju’s founder, Byju Raveendran, took decisive action to address the ongoing issues faced by the crisis-ridden edtech company. In an extraordinary general meeting (EGM) held on July 4, Raveendran addressed shareholders following the recent resignations of three key directors and the auditor. The EGM was called to discuss and find solutions for the challenges facing Byju’s.
During the meeting, Raveendran acknowledged the need for immediate action and proposed the formation of a Board Advisory Committee (BAC). The primary objective of the BAC would be to provide valuable advice and guidance to the CEO regarding matters related to the composition of the board and the governance structure suitable for Byju’s.
The establishment of a Board Advisory Committee demonstrates Raveendran‘s commitment to addressing the company’s issues transparently and responsibly. By involving a committee of experienced individuals who possess the necessary expertise, Byju’s aims to benefit from their insights and recommendations in restructuring its board and governance practices.
The BAC’s responsibilities would likely include evaluating the current board’s composition, identifying any skill gaps, and proposing potential candidates for director positions. Additionally, they would advise on best practices in corporate governance, ensuring transparency, accountability, and ethical decision-making within the company.
Byju’s, a prominent player in the edtech sector, has been going through a challenging phase with recent high-level resignations and concerns about governance. By initiating the formation of the BAC, Raveendran aims to restore confidence among shareholders, strengthen the company’s corporate governance, and pave the way for a more stable and prosperous future for Byju’s.
It remains to be seen how the newly formed Board Advisory Committee will shape Byju’s governance structure, but this move demonstrates Byju Raveendran’s commitment to resolving the company’s issues and steering it back on track. With the guidance of the BAC, Byju’s can make informed decisions that align with its vision and values, ensuring a solid foundation for growth and success in the competitive edtech industry.
During the extraordinary general meeting (EGM) held by Byju’s, founder Byju Raveendran informed shareholders about the formation and purpose of the Board Advisory Committee (BAC). Raveendran emphasized that the BAC would consist of independent directors with credible backgrounds and relevant experience from diverse corporate fields. This composition ensures a wide range of perspectives and expertise to guide the company’s governance structure effectively.
Raveendran also announced that another EGM would be organized in approximately three weeks. During this upcoming meeting, the members and composition of the Board Advisory Committee would be discussed in detail. This highlights the company’s commitment to transparency and involving shareholders in important decision-making processes.
The EGM was attended by a majority of Byju’s 70+ shareholders, and investor representatives had the opportunity to pose questions to key individuals including Byju Raveendran, Divya Gokulnath (his wife and director), and the newly appointed CFO Ajay Goel. The investors sought updates on various crucial matters, such as the timeline for the Aakash IPO, the progress of the company’s audit, developments regarding the TLB (Term Loan B) resolution, and the status of long-pending fundraising efforts.
By addressing these concerns and providing updates on important matters, Byju’s aims to instill confidence in its shareholders and demonstrate its commitment to resolving ongoing challenges. Open communication with investors helps build trust and allows for a clearer understanding of the company’s direction and progress.
Overall, the EGM served as a platform for Byju’s to update shareholders on its initiatives, including the formation of the BAC, and address pressing queries from investors. These steps indicate the company’s proactive approach to navigating its current crisis and working towards a more stable and prosperous future.
Byju’s has been engaged in a dispute with its term loan B (TLB) lenders since December of the previous year. This conflict has led to both Byju’s and the bondholders filing lawsuits against each other in various courts in the United States.
However, during the extraordinary general meeting (EGM), Byju Raveendran assured shareholders that the company is actively and constructively engaged in discussions with the bondholders. He expressed optimism about reaching a mutually acceptable resolution to the issue. Raveendran emphasized that both parties involved are motivated to avoid protracted legal proceedings and instead work towards a resolution that benefits everyone involved.
By acknowledging the ongoing discussions and expressing optimism, Raveendran aimed to assure shareholders that the company is actively seeking a resolution to the dispute. This approach indicates Byju’s commitment to finding a mutually beneficial solution that allows the company to move forward.
Resolving the tiff with the TLB lenders is crucial for Byju’s as it would help alleviate the uncertainties and potential financial implications associated with the legal proceedings. By emphasizing the willingness of both parties to seek a resolution, Raveendran sought to convey the company’s commitment to resolving the issue in a manner that benefits all stakeholders.
While the specific details of the discussions and the potential resolution were not provided, Raveendran’s statement indicated a positive outlook and a proactive approach to resolving the conflict. Byju’s aims to reach a favorable outcome that ensures the company’s stability and allows it to focus on its core mission of providing quality education through its edtech platform.
Goel stated that BDO has allocated significant resources for the audit and mentioned that the audit for most subsidiaries for the fiscal year 2022 has been successfully completed. However, parallel audits are currently underway for Aakash, WhiteHat Junior, and Think & Learn, with the aim of optimizing timelines.
Divya Gokulnath, a director at Byju’s, updated shareholders on the company’s media outreach and external communication activities. She highlighted that an independent agency measured the overall social media sentiment for Byju’s in the last week to be 82 percent positive.
Earlier, there were reports in Mint newspaper claiming that certain investors were seeking the ouster of Byju’s founder Byju Raveendran. However, Byju’s promptly denied these reports. Independent investor representatives, Saurabh Gupta from DST Global and Alan Kim from ARK Impact Asset Management, also denied any discussions regarding Raveendran’s removal.
In summary, Byju’s provided updates on the ongoing audit process conducted by BDO and emphasized their commitment to completing the audits for all relevant entities. They also shared positive social media sentiment and addressed and refuted reports of investor discontent and any discussions regarding Raveendran’s ouster.
