Netherlands-based Prosus, which owns about 9.6% stake in Byju's, said on Tuesday that the leadership at the education-technology start-up "regularly disregarded" its advice on how to run the company.
"Despite repeated efforts from our director, executive leadership at Byju's regularly disregarded advice and recommendations relating to strategic, operational, legal and corporate-governance matters," the technology investor said in a statement. "The decision for our director to step down from the Byju's board was taken after it became clear that he was unable to fulfil his fiduciary duty to serve the long-term interests of the company and its stakeholders."
The director here being referred to is Prosus' Russell Dreisenstock, who stepped down from the board of Byju's parent Think & Learn Pvt., alongside Peak XV Partners' GV Ravishankar and Chan Zuckerberg Initiative's Vivian Wu around a month ago.
Prosus said that as Byju's grew, "its reporting and governance structures did not evolve sufficiently for a company of that scale".
"Although we no longer have a representative serving on the board of the company, we continue to believe in the potential of Byju's," it said. "As a shareholder, Prosus will continue to assert its rights, collaborating with other shareholders and government authorities to safeguard the long-term interests of the company and its stakeholders."
"We have noted the observations of our valued investors. We have updated our shareholders about definitive steps taken to improve corporate governance and financial reporting," a spokesperson for Byju's told BQ Prime.
In its own books, Prosus had also marked down the valuation of its 9.6% stake to $493 million, giving Byju's an enterprise valuation of about $5.14 billion. That is less than a fourth of the $22 billion at which it raised funds less than a year ago.
The Bengaluru-based startup has been rocked by a string of negative developments, with the resignations of statutory auditor Deloitte and three board members representing key investors in the company.
It even opted to miss a $40-million interest payment on its term loan in June, challenging the "acceleration" of the $1.2-billion term loan and disqualifying Redwood—an agent of the lenders—who it said had indulged in a series of "predatory tactics".
The past 12 months have seen founder Byju Raveendran and Chief Operating Officer Mrinal Mohit reach out directly to employees amid potential protests by employees, searches by the Enforcement Directorate, layoffs, and delayed financial results.
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