The remaining board members of Byju’s are Riju Ravindran, Byju Raveendran, and Divya Gokulnath after the resignations of three Byju’s board members, G V Ravishankar of Sequoia Capital (Peak XV Partners), Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus.
In the latest blow for India’s most valuable company, three Byju’s board members have submitted their resignations due to disagreements with founder Byju Raveendran on critical operational concerns. According to sources with knowledge of the situation, three Byju’s board members, G V Ravishankar of Sequoia Capital (now Peak XV Partners), Vivian Wu of the Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus have all announced their resignations. These three board members indicated their resignations had not yet been accepted.
Moneycontrol submitted inquiries to Peak XV Partners (formerly Sequoia Capital India) and Prosus, but neither company responded right away. The development was rejected by Byju’s and described as “entirely speculative”.
One of the above-mentioned people close to shareholders said, “Since last year, there have been continuing conflicts between the founders and the board about the way the firm was operated.
“Byju Raveendran’s approach to lender management differed from others. There was no openness in the way the firm was run, and the founders did not pay attention to the board of directors or the investors. The development of trust was weak, the individual said.
These Byju’s board members notified shareholders of their resignations at a meeting of Byju’s investors held on Sunday, the source continued.
The move is a major blow for the most valuable edtech company in the world, which is currently at odds with its US bankers and coping with rising financial difficulties in India. Additionally, it shows that the organization is experiencing operational and financial difficulties.
The resignation of the Byju’s board members coincides with Byju’s plans to go public by the middle of 2024 with Aakash Educational Services, the company’s most profitable purchase to date. Early in June, the Byju’s board formally authorized the Aakash IPO.
Byju’s said earlier this month that it has filed a lawsuit in the New York Supreme Court against one of its lenders, contesting the acceleration of the term loan B it obtained in November 2021. Additionally, Byju’s failed to pay the $40 million in interest which was due on June 5; as a result, the loan was technically in default.
To be sure, Byju’s has been in communication with its lenders since December of last year, when the business requested more flexible loan conditions in an effort to reduce expenses.
However, after Byju’s failed to satisfy a number of requirements, including a September 2022 deadline for publishing its results for the year ending March 31, 2022, the company’s lenders requested a speedier part payment of the $1.2 billion loan, according to Bloomberg News. After bringing a lawsuit against the corporation in a Delaware court earlier this month, the lenders ended these negotiations.
In March of last year, when it completed a massive $800 million round at a $22 billion value, Byju’s reached new heights. Since then, however, the business has faced criticism for a variety of issues, including accounting errors, a dispute with lenders, a wave of layoffs, and growing losses. Since then, Byju’s has funded $250 million at the identical $22 billion value, and it is in discussions to raise an additional $700 million at the same price.
In accordance with the rules of the Foreign Exchange Management Act, Enforcement Directorate, India’s financial investigation agency, also searched Byju’s headquarters in Bengaluru in April. For FY22 (2021–2022), the corporation has yet to submit audited results.
Since FY21 was the first year of Covid, which provided online learning enterprises a boost, Byju’s reported a large increase in losses to more than Rs 4,500 crore while seeing a slight decline in sales.
Byju’s, a company founded by former teacher Byju Raveendran more than ten years ago, has raised more than $5 billion, the most of it in the last five years.
Deloitte, one of the largest audit companies in the world, has submitted its resignation as Byju’s statutory auditor, adding to a lengthy list of resignations. Byju’s is left in uncertainty as a result of Deloitte’s departure since the edtech company’s FY21 (2020-21) results revealed a number of anomalies with regard to its revenue recognition procedures.
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