SUMMARY
BYJU’S had moved the Karnataka High Court against the EGM called by its investors later this week to reconstitute the edtech giant’s board and oust its leadership team
The HC said that any decision taken by the shareholders of BYJU’S in the EGM shall not be given effect to till the next hearing on March 13
A BYJU’S spokesperson termed the order an immediate relief and said the ruling ensures that the company can continue its operations with stability and focus
In what could be seen as temporary relief for beleaguered edtech giant BYJU’S, the Karnataka High Court on Wednesday (February 21) said that any decisions taken by shareholders at the upcoming extraordinary general meeting (EGM) will not come into effect till the next hearing.
The court was hearing a petition filed by Think & Learn, the parent company of BYJU’S, against its investors.
“The decision, if any, taken by the shareholders of the petitioner Company in the extraordinary general meeting scheduled on 23.02.2024, shall not be given effect to, till the next date of hearing. Issue emergent notice to the respondents,” according to the HC’s interim order, a copy of which has been seen by Inc42.
The HC has listed the matter for hearing on March 13.
However, sources told Inc42 that the court didn’t order a stay on the EGM as per BYJU’S plea. They said that the EGM will be held on Friday and most of the investors are expected to vote in favour of removal of cofounder Byju Raveendran from the company.
BYJU’S investors have called for an EGM on February 23 to oust CEO Byju Raveendran, his wife Divya Gokulnath and brother Riju Ravindran from the company’s board and wrest control of the company. The investors were also mulling legal options in case the EGM fails to fructify.
Responding to the court order, a BYJU’S spokesperson termed it an immediate relief. It said that the court had termed potential resolutions passed at the upcoming EGM as “invalid”.
However, the court’s interim order does not specifically invalidate the EGM or any resolutions passed during the meeting. It only states that any decisions taken cannot be brought into effect till March 13, at the very least.
“The court’s decision to grant immediate relief to BYJU’S by invalidating the resolutions passed by the EGM, underscores its recognition of the need to protect BYJU’S best interests, and uphold the principles of corporate governance. The ruling ensures that the company can continue its operations with stability and focus, safeguarding the interests of all stakeholders,” said the company in a statement.
The edtech giant filed the plea under Section 9 of The Arbitration and Conciliation Act, 1996. In its petition, it argued that certain investors violated the articles of association, the shareholders’ agreement and the Companies Act, 2013 by calling for an EGM.
As per the company, the investors in question include General Atlantic, Chan Zuckerberg Initiative, MIH EdTech Investments, Own Ventures, Peak XV Partners, SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, Sofina, and T. Rowe Price Associates.
