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Low turnout at investors' EGM, any resolution unenforceable, claims Byju's
Embattled edtech major Byju’s on Friday claimed that the resolutions passed during the investors' extraordinary general meeting (EGM) are "invalid and ineffective" and the passing of the "unenforceable resolutions" challenges the rule of law "at worst".
New Delhi: Embattled edtech major Byju’s on Friday claimed that the resolutions passed during the investors' extraordinary general meeting (EGM) are "invalid and ineffective" and the passing of the "unenforceable resolutions" challenges the rule of law "at worst".
The company said that the resolutions were "voted upon without the valid constitution of a quorum, as stipulated in BYJU'S Articles of Association (AoA). According to Articles 38 and 39(a) of the AoA, at least one founder-director is required to form a valid quorum".
The edtech company said in a statement that as the founders did not participate in the meeting, "the quorum was never legitimately established, rendering the resolutions null and void".
The EGM was called by select investors to oust the co-founder and CEO Byju Raveendran from the company, which is facing regulatory hurdles amid a cash crunch.
The company also highlighted "the improper conduct displayed by the organisers throughout the EGM".
Byju’s claimed that several shareholders were not allowed to participate in the meeting.
"Such violations further underscore the lack of propriety and fairness in the proceedings, raising serious doubts about the validity of any resolutions passed," the company said.
"The due process required under law was not adhered to, and several of these actions contemplated would cause the company to materially violate its AoA. A small group of shareholders cannot compel the company or the Board to violate the AoA, no matter how much media pressure they may apply," it added.
On Wednesday, the Karnataka High Court ordered that any resolutions, to be passed in the EGM, will not hold ground until the final hearing and disposition of the petition on March 13, filed by Think & Learn Private Ltd, the parent company of Byju’s.
Meanwhile, Byju’s key investors -- Prosus, General Atlantic, Sofina, and Peak XV -- moved the National Company Law Tribunal (NCLT) over its $200 million rights issue.
According to investor sources, the shareholders have cited "suppression of investor rights and mismanagement of the company" in its petition to the tribunal.
