Byju's investors push for leadership change amidst financial woes

Major investors in Byju's have submitted a proposal demanding the removal of the company's founders, including CEO Byju Raveendran.

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Byju's, the Indian ed-tech giant grappling with financial woes, faces a major power struggle as six key shareholders have moved a resolution to remove the founders from control of the company. This extraordinary move comes amidst mounting concerns about governance, financial mismanagement, and compliance issues at the firm.

According to sources, a group of investors led by Dutch investment firm Prosus has called for an extraordinary general meeting (EGM) to address these concerns. The notice sent to shareholders outlines three key resolutions: resolving outstanding governance and financial issues, reconstituting the board to break founder control, and changing the company's leadership.

These demands are backed by heavyweight investors like General Atlantic, Peak XV, Sofina, Chan Zuckerberg Initiative, Owl Ventures, and Sands Capital, who collectively hold around 30% stake in Byju's. Notably, they are pushing for the immediate removal of co-founder and CEO Byju Raveendran.

This investor rebellion comes after Byju's failed to respond to previous EGM requisition notices sent in July and December. It also coincides with the company's deepening financial crisis. Byju's, once valued at $22 billion during the pandemic-driven online education boom, is now struggling with mounting liabilities and missed loan payments. 

Lenders recently filed an insolvency petition against the company, while Byju's itself seeks a $200 million bailout through a fire sale of new shares, potentially diluting its value by over 90%.

With the company's future looking increasingly uncertain, investors appear to have lost faith in the current leadership. The upcoming EGM will be a crucial test for Byju's founders, who must now face the discontent of their key stakeholders and convince them of a viable path forward. 

This power struggle adds another layer of complexity to Byju's already troubled saga, with the company's future hanging in the balance.