A group of four investors of the embattled edtech major Byju’s on Friday moved the Bengaluru bench of the National Company Law Tribunal (NCLT), filing a petition against oppression and mismanagement by the company.
Also read: Byju’s overseas lenders file insolvency proceedings in India
The investors are seeking to declare the founders as unfit to run the company, appoint a new board, declare the rights issue as void and conduct a forensic audit, among other reliefs, said investor sources.
The investors in the NCLT suit have also raised concerns, including financial mismanagement by the founders leading to losing control of Aakash, Byju’s Alpha (TLB loan) default, prolonged corporate governance issues, including non-hiring of a CFO & independent director, oppressive nature of the $200-million rights offer, regulatory non-compliance, oppressive opacity and wilful default in sharing information with stakeholders.
The petition has been signed by four investors - Prosus, GA, Sofina, and Peak XV - with support from other shareholders, including Tiger, Owl Ventures.
The plea seeks declaration of the just-concluded $200-million rights offer as void and seeks a direction that the company should not take any corporate actions that will prejudice the rights of investors.
The plea also mentions inter-corporate loans taken on undisclosed terms and multiple insolvency petitions filed by BCCI, TLB lenders and Surfer Technologies Pvt Ltd.
“The company has not received any formal intimation of any such petition being filed in the NCLT. It cannot comment on rumours on the same. Indian regulations stipulate due process for conducting an EGM, intimation of petitions being filed in NCLT, etc. But certain shareholders prefer to manufacture a media spectacle as opposed to following due process. If such a petition has been filed, the company shall respond to the same as per Applicable Law and due process,” said Byju’s spokesperson.
Also read: Byju’s employees allege TDS non-compliance by company
This comes at a time when a group of investors are conducting an extraordinary general meeting. Investors attending the meeting were allegedly disrupted by employees of the embattled start-up when the virtual call commenced around 9 am, reported businessline.
Raveendran and his family members have refused to attend the EGM, terming it as ‘invalid.’