Four investors take legal action against Byju's, seek declaring founder unfit to run firm

By Team Asianet Newsable | First Published Feb 23, 2024, 12:44 PM IST

Investors, who are seeking the ouster of Raveendran and family from the Byju's board at an extraordinary general meeting of shareholders for alleged "mismanagement and failures" at what was once India's hottest tech startup, have also sought a forensic audit of the company

Four investors of Byju's, the prominent educational technology company, have taken legal action by filing an oppression and mismanagement suit in the National Company Law Tribunal (NCLT). Their lawsuit aims to declare the founder, Byju Raveendran, unfit to continue leading the firm.

In the plea filed before the National Company Law Tribunal (NCLT) on Thursday evening, investors, who are demanding that Raveendran and his family be removed from the Byju board at an extraordinary general meeting of shareholders due to purported "mismanagement and failures" at what was once India's hottest tech startup, have also asked for a forensic audit of the business.

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According to the document, the investors want to choose a new CEO and board and declare the current administration unable to run the business. In addition, the plea requests a forensic audit and an order for management to provide information to investors.

Also Read | Explained: What is lookout circular issued by ED for Byju's co-founder Byju Raveendran?

Prosus, GA, Sofina, and Peak XV are the four investors that have signed the petition. Other shareholders who have supported it include Tiger and Owl Ventures.

The lawsuit brought up a number of concerns, including the founders' financial mismanagement that caused them to lose control of Aakash, Byju's Alpha (a TLB loan) default, and ongoing problems with corporate governance, such as the failure to hire an independent director and a CFO.

The Enforcement Directorate has upgraded its Look out Circular (LOC) against the 43-year-old BYJU’S founder. The development comes a day after the Karnataka High Court refused to stay an emergency shareholder meeting that seeks to oust Raveendran and his family from the company bearing his name.

Also Read | Ahead of big investors' meet and amid ED lookout, Byju's CEO Byju Raveendran in Dubai?

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