NCLT declines to stay EGM called by Byju's over $200 million rights issue

The National Company Law Tribunal (NCLT), Bengaluru Bench, on Thursday declined to grant a stay on the extraordinary general meeting (EGM) on March 29 called by 'Think and Learn', owner of the Byju's brand.

The EGM was called to increase the authorised share capital of the embattled edtech firm, following the recent USD 200 million rights issue.

A group of four investors of Byju's has filed an oppression and mismanagement suit against the management of the company before the NCLT, Bangalore Bench, seeking to oust the founders, including CEO Byju Raveendran, and appoint a new board.

On Thursday, the Karnataka High Court said that it will deliberate on the case involving the investor group's efforts to oust Raveendran only after two months.

Besides, the suit filed by the group of investors also sought to declare the just-concluded rights issue as void.

The petition has been signed by four investors Prosus, General Atlantic, Sofina, and Peak XV along with support from other shareholders, including Tiger and Owl Ventures.

The tribunal had asked Byju's to consider extending the closing date of the USD 200 million rights issue, a request that the management hinted it would not accept, even as estranged investors flagged technicalities that prevented the closure of the issue on Wednesday.

In an interim order dated February 27, the NCLT said the funds received by the company through the rights issue should be kept in a separate escrow account and not withdrawn until the matter is disposed of.

The miffed investors led by Prosus want to remove Raveendran and his family members from the board.

These investors, who hold around 32 per cent stake in the edtech firm, had called the EGM on February 23 and claimed that over 60 per cent of the investors in the meeting voted in favour of resolutions proposed by them, including the removal of CEO Byju Raveendran.