Byju Raveendran Says Reports Of Expulsion 'Exaggerated And Highly Inaccurate'
The letter comes a day after Prosus said that shareholders had voted "unanimously" to unseat the entrepreneur and his family.
Byju Raveendran wrote a letter to his employees on Saturday, denying media reports of his being ousted as the chief executive officer.
He said that he continues to remain Byju's CEO and that the business remains "as usual" at Byju's.
The letter comes a day after shareholders of the Bengaluru-based edtech platform voted "unanimously," according to a statement by Prosus, to unseat the entrepreneur and his family. Byju's, on the other hand, maintained that all resolutions passed during the EGM were "invalid and ineffective."
"Just as you can't change the rules of a game midway without agreement from all players, we can't alter how our company is run without following these strict guidelines," Raveendran said in the letter.
"At yesterday's Extraordinary General Meeting (EGM), a lot of these essential rules were violated. This means that whatever was decided in that meeting does not count because it didn't stick to the established rules," he added.
In the letter, Raveendran outlined key discrepancies in the EGM:
The meeting was convened without following the proper procedure set out by the law and the company’s articles of association.
To pass any resolution, the meeting needs to have a proper quorum, a set of people who are mandatory—at least one founder and director. Consequently, any resolutions taken at the meeting are not enforceable according to the law.
Only 35 out of 170 shareholders, which represents around 45% of the shareholding, voted in favour of the resolution. That in itself shows the very limited support that this irrelevant meeting received.
The shareholder agreement grants the authority to modify the board's composition, the management team, and the CEO's role exclusively to the board, not to a group of shareholders. Recognising this, these few select investors have framed their resolution in a manner that requests the board to merely "consider" changes to the current board structure rather than directly mandating it.
Karnataka High Court had granted interim relief, clearly stating that any decisions made during the meeting would not be given effect until the resolution. This order, coupled with numerous procedural irregularities and deficiencies, invalidates the resolutions passed by a select, narrow group of shareholders.
Further, Raveendran said that the minority shareholders spread misinformation in the media. Nevertheless, the management will focus on operations and he will challenge "these illegal and prejudicial actions."
"Our rights issue has seen an overwhelming response...This momentum is irreversible, and our comeback is now inevitable," he said in the letter, reiterating the talk of expulsion as "greatly exaggerated and highly inaccurate."
