Byju's Taken To Insolvency Court By Prosus, General Atlantic, Two Other Investors

Four of Byju's investors have filed a suit against the beleaguered edtech firm with the National Company Law Tribunal, alleging financial mismanagement, oppressive rights offer and multiple previous insolvency petitions.

The four investors are Prosus, General Atlantic, Sofina and Peak XV Partners, according to people familiar with the matter who spoke on the condition of anonymity.

In the petition, the investor consortium raised concerns regarding financial mismanagement by the founders, which led the company to cede control of Aakash Educational Services Ltd. to Ranjan Pai.

They also cited the term loan B default by U.S. unit Alpha, prolonged corporate governance issues, including non-hiring of a chief financial officer and independent directors, the pricing of the rights issue, regulatory non-compliances, opacity in information sharing.

Other issues include unauthorised corporate actions regarding acquisition of Singaporean edtech firm Northwest Education, inter-corporate loans on undisclosed terms and the multiple insolvency petitions filed by Board of Control for Cricket in India, term loan B lenders Glas Trust Co., Surfer Technologies Pvt., and French BPO Teleperformance.

In a statement, a Byju's spokesperson denied any formal intimation of such a petition.

"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," the spokesperson said.

The fresh suit comes on the heels of an extraordinary general meeting called by the edtech's investors, to vote on resolutions to remove Chief Executive Officer and Founder Byju Raveendran and his family from the helm of the company.