The Karnataka High Court granted temporary relief to Byju Raveendran, the creator of Byju’s, on Wednesday. The court halted the implementation of any decisions that would have been made at the company’s next extraordinary general meeting (EGM), which is scheduled for February 23. Given that major Byju’s investors and shareholders, including Chan Zuckerberg Initiative, General Atlantic, Prosus Ventures, and Peak XV, have summoned the EGM to debate a change in the company’s leadership, the order essentially shields Raveendran from potential termination.
According to reports, the shareholders want to reorganise the board, remove Raveendran, and take action about the financial management. Byju’s filed a lawsuit after the investors, acting under Section 100(3) of the Companies Act, issued a notice demanding an EGM on February 23. Primarily, Justice Anant Ramanath Hegde, a lone judge, noted that the requirements for calling the EGM had not been met. The Court issued the temporary stay order in light of this.
“Neither the requirements nor the notification required by Section 100(3) of the Companies Act are met in order to call an EGM. This Court believes that the interim order must be issued in light of the submissions made and the records reviewed. The Court stated that the decision, if any, made by Byju’s shareholders at their EGM on February 23 would not take effect until the following hearing date.
Byju’s contended that the EGM was called at the request of the shareholders without adhering to the Companies Act’s protocol. The corporation contended that notice requirements, among other requirements, were not met in order to call the EGM. The submissions were accepted by the court, which also granted temporary relief. On March 13, the case will next be heard.
Concurrently, the company’s lenders have submitted applications to the National Company Law Tribunal (NCLT) requesting the commencement of bankruptcy procedures against Byju’s. First, on February 6, NCLT Bengaluru heard a petition from digital marketing company Surfer Technologies. The second is from Glas Trust Company LLC, an international lender, and the third, which was heard on February 8, is from Tele Performance Business Services, a business process outsourcing (BPO) company.
