Byju's tells investors: "You've no right to ask for a change in CEO"

Signatories to the EGM notice include Prosus, General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands, according to sources. These investors collectively represent nearly 30% of the shareholders of the edtech company. The EGM was called on February 23, a person directly aware of the development told CNBC-TV18.

In June 2023, the representatives of its key investors Prosus, Peak XV Partners, and Chan Zuckerberg Initiative resigned from the board due to differences with the founders. The current board of directors of BYJU's parent T&L comprises Byju Raveendran, co-founder, and wife Divya Gokulnath, and his brother Riju Raveendran.

The stand-off between Byju’s and some of its investors has come to the fore soon after the company launched a 200 million dollar rights issue at a post-money valuation of $225 million — and the firm has said that despite the criticisms of a few investors, it will go ahead with it.

"TLPL will continue with the proposed $200 million rights issue after receiving encouraging responses from multiple investors. The company is gladdened by the support received by a wide section of its shareholders," it said in a statement.

"The criticality of the rights issue has been shared with all shareholders, with capital being pivotal for a successful turnaround. Unfortunately, the company and our employees are paying the price for a stand-off triggered by some investors. Business continuity is essential, and we shall priorities this in our actions," the statement added.

The company has also said Byju Raveendran and his leadership team, along with the advisory board consisting of Rajneesh Kumar and Mohandas Pai, have constituted a working group with the investors and have been providing updates on all crucial matters.

"The company and its leadership have updated the working group on all crucial matters, including ongoing business restructuring, financial position, and audits. TLPL has been turning around the business, cutting the monthly burn to near operational breakeven, and working on an AI-led technological refresh soon. In context, the actions of some unnamed investors are disruptive at a highly challenging time," Byju’s said.

Remember — Byju’s clocked nearly one billion dollars in losses in FY22 and the FY23 audit is still awaited. In a filing with the Ministry of Corporate Affairs, the company said it clocked a 2.18x increase in revenue from ₹2,428 crore in FY21 to ₹5,298 crore in FY22.

Losses ballooned 1.8x from ₹4,564 crore in FY21 to ₹8,245 crore in FY22. This translates into an EBITDA loss of ₹4,599 crore in FY22 from ₹8,370 crore in FY21. Expenses went up 2x from ₹7,027 crore in FY21 to ₹13,668 crore in FY22.

Embattled edtech company Byju’s has not yet paid salaries for January amid a worsening liquidity crisis, as per reports. Not just that, a US unit of Byju's has filed for Chapter 11 bankruptcy proceedings in the US court of Delaware, listing liabilities in the range of $1 billion to $10 billion.

Byju's Alpha unit listed its assets in the range of $500 million to $1 billion, according to a court filing, which showed estimated creditors in the range of 100 to 199.