Despite legal challenges from existing investors, leading ed-tech company Byju’s extraordinary general meeting (EGM) is scheduled to be held today i.e. on March 29, 2024. The National Company Law Tribunal (NCLT) refused to stay the EGM scheduled for raising the authorized share capital of the company to facilitate the USD 200 million rights issue.
Also Read | Adani Ports Expands East Coast Presence with Gopalpur Port Acquisition
Legal Battle Unfolds
The EGM, crucial to Byju’s fundraising efforts, faced opposition from existing investors, mainly led by Prosus, who sought to halt the rights issue fearing significant losses. He contacted NCLT Bengaluru and requested to put a stay on the EGM.
In a judgment delivered on Thursday, the NCLT bench of Justices K Biswal and Manoj Kumar Dubey refused to stay the EGM, deferring the final decision to April 4. The tribunal said that although the meeting cannot be stayed, its decisions can be challenged later.
Investor Concerns
Senior counsel for Prosus, Sudipto Sarkar, emphasized the need to halt the EGM proceedings, alleging procedural irregularities and a lack of transparency. Sarkar argued that certain shareholders were not properly served with notices, and Byju did not provide adequate access to essential documents for informed decision-making.
Byju’s Defense
Byju’s legal counsel, headed by K G Raghavan, parallelly tried to explain that the affected parties were placed on equal footing and were duly informed, and the books were giving them enough time to review and scrutinize. They stressed that the only reason for EGM was only the expansion of authorized capital, showing the cost of observing the jurisdiction.
High Court Intervention
In parallel to that, the Karnataka High Court also noted its order on the interim stay that the investors called an annual general meeting of the shareholders which was aiming to remove Byju Raveendran, who is the company’s managing director. At this point, the matter is deferred until May 28, for now providing a reprieve for the management of Byju’s, ruled by tough circumstances.
Also Read | SRM Contractors Limited Enters the Indian Primary Market with an IPO
The Road Ahead
With the EGM going ahead as scheduled and the legal battle continuing, Byju’s is entering a crucial phase in its growth path. The outcome of these legal clashes will have a significant impact on the company’s fundraising efforts and governance structure, shaping its future course in the competitive ed-tech landscape.
