NCLT grants no relief to investors, Byju's to hold EGM on March 29
The investor's counsel has alleged that Byju's is bypassing laws to hold the EGM for increasing authorised share capital and claims that the investors are unaware of what is happening in the company. All the shareholders have not been served the EGM notice, according to the claims.
A group of investors has sought legal intervention from the National Company Law Tribunal (NCLT), Bengaluru, to stop Byju's parent company Think & Learn from holding an extraordinary general meeting (EGM) on March 29. The quasi-judicial tribunal has granted no relief to the investors and will hear the matter on April 4.
The edtech company had proposed an EGM to consider the additional shares that are to be issued for the Rights Issue. The authorised share capital of the company needs to be increased to ₹51.56 crore from ₹6.56 crore, consisting of 4.82 crore equity shares. The company also plans to consider the authorised share capital to be reserved for any stock option plans and for any conversation of Compulsorily Convertible Preference Shares (CCPS) to equity shares.
The investor's counsel has alleged that Byju's is bypassing laws to hold the EGM for increasing authorised share capital and claims that the investors are unaware of what is happening in the company. All the shareholders have not been served the EGM notice, according to the claims. The person sending the notice is said to have admitted that he does not have all the email addresses of all the stakeholders.
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The council has asserted that the meeting is void if all shareholders do not receive a notice for the EGM.
Byju's aimed to finish the rights issue within 60 days starting from January 29, but the voting for the Extraordinary General Meeting (EGM) will continue until April 6. The EGM is convened to finalise the Rights Issue. Additionally, Think & Learn plans to amend the Company's Memorandum of Association through the EGM if the rights issue falls through.
The Think & Learn Counsel, in its defence, said that the meeting is only limited to the increase of authorised share capital. The company has countered the investor's claims and argued that the EGM notice has been dispatched to all the shareholders and they can participate and vote.
The increase in authorised share capital complies with the court's directions with respect to the rights issue. The defence has alleged that the investors' petition objective is to try and ensure the rights issue does not go through. "We said the company needs money, and petitioners (investors) are just trying to stop us from doing so via these petitions," the Think & Learn Counsel told the court.
"Why can't the investors just go to the EGM and vote as they please?", the court observed to which the investors' counsel said that they missed the chance to talk to other members to discuss the agenda and strategy.
The Think & Learn Counsel argued that those who haven't received the EGM notice should file a complaint.
First Published: Mar 28, 2024 1:46 PM IST
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