Byju’s vs investors: K’taka HC extends stay on investors’ resolutions

BENGALURU: The Karnataka High Court on Wednesday extended its interim order till March 28, restraining investors of Byju’s not to bring in effect any resolutions passed at the Extraordinary General Meeting (EGM) held last month.

This is a big relief to founder Byju Raveendran as in the EGM called by investors including Prosus and General Atlantic, holders of over 60% of the cap table voted in favour of change in leadership of the company.

These investors also filed an oppression and mismanagement suit against Raveendran and management in the National Company Law Tribunal (NCLT) Bengaluru branch.

Edtech firm Byju’s had moved the Karnataka High Court last month seeking a stay on the outcome of the EGM called by select investors. The HC in response to a petition filed by Think & Learn Private Limited, the parent company of Byju’s, had passed an order stating that any resolutions proposed to be passed on February 23 at the EGM as invalid until the final hearing and disposition of this petition.

Separately, the NCLT Bengaluru bench scheduled the next hearing of the insolvency plea filed by the Board of Control for Cricket in India (BCCI) against the firm on March 20.

According to sources, Byju’s counsels pushed for the case to be taken to arbitration.

Sources also said that they argued that the BCCI did not render any service post the culmination of the contract and the present debt (Rs 158 crore) cannot be considered as an operation debt.

Meanwhile, in the NCLT hearing held on Tuesday, Think and Learn and Aakash Educational Services have withdrawn the merger petition. Byju’s spokesperson said, “The petition to withdraw the merger approval was a preplanned and mutually agreed process. Both the companies were running independently as separate entities under the Think and Learn brand and continue to do so. What happened at NCLT today (Tuesday)was procedural to complete the required formalities.”

Byju’s acquired Aakash for about $950 million in a cash and stock deal in 2021. Recently, the family office of Ranjan Pai, Manipal Education and Medical Group Chairman, invested Rs 1,400 crore in Aakash to clear its debt to Davidson Kempner.

For Byju’s, both its subsidiaries Aakash and Great Learning have been performing well, as they grew 40% and 77%, respectively, immediately after acquisition. Last year, Byju’s had announced that it would launch the IPO of Aakash mid 2024.