Four investors of BYJU'S have filed an oppression and mismanagement lawsuit against the business's management before the Bengaluru bench of the National Company Law Tribunal (NCLT), seeking to declare the founders, including Chief Executive Officer (CEO) Byju Raveendran, incompetent to run the company and to appoint a new board.
Furthermore, the suit also seeks to declare the recently completed rights issue void, PTI reports.
Investors seeking the ouster of Raveendran and his family from the BYJU'S board at an extraordinary general meeting (EGM) of shareholders for alleged "mismanagement and failures" at what was once India's hottest tech start-up have also requested a forensic audit of the company in a plea filed before the NCLT on the evening of Thursday, February 22, according to a court filing.
According to the filing, the investors want to declare the current management unsuitable to run the company and select a new CEO and board.
The plea also requests a forensic audit and a directive to management to share information with investors.
As per sources, the plea seeks to declare the recently ended USD 200 million rights sale void and to instruct the business not to take any corporate activities that may jeopardise the investors' interests.
The investors — Prosus, GA, Sofina, and Peak XV — have signed the petition with support from other shareholders, including Tiger and Owl Ventures.
The plea has been filed to prevent value erosion for all shareholders as well as preserve worth for other stakeholders, that is, employees and customers.
Concerns stated in the action included the founders' financial mismanagement, which resulted in the loss of control over Aakash, the default of BYJU'S Alpha (TLB loan), and ongoing corporate governance difficulties, such as the failure to hire a Chief Financial Officer (CFO) and an independent director.
Other complaints include the "oppressive nature" of the rights offer, claimed regulatory noncompliance, "oppressive, opacity, and wilful defaults" in sharing information with shareholders, and illegal corporate acts related to the acquisition of Singaporean EdTech business, Northwest Education Pte.
The appeal also highlighted inter-corporate loans with secret terms and several insolvency petitions filed by the Board of Control for Cricket in India (BCCI), TLB lenders, and Surfer Technologies.
