Global investment firm Prosus (previously Naspers) said that it had left Byju’s board because, despite the ed tech’s rapid growth, its reporting and governance systems had not advanced to the level required for a business of Byju’s size.
One of the three non-promoter board members of Byju’s who left in June hasn’t previously discussed his or her reasons for doing so.
The executive leadership of Byju’s routinely disregarded advice and recommendations about strategic, operational, legal, and corporate governance issues, despite the persistent efforts of our Director.
“After it became evident that our Director was unable to uphold his fiduciary responsibility to serve the long-term interests of the Company and its stakeholders, the decision for him to resign from the Byju’s Board was made,” the statement read.
The three non-promoter board members resigned in June, and the business first disputed that this was the cause.
In a statement, it claimed that the decision was made as a result of investors’ shareholdings declining below a certain level.
Peak XV (previously Sequoia India) representative GV Ravishankar, Chan Zuckerberg Initiative representative Vivian Vu, and Prosus representative Russel Dreinstock all departed from the board, leaving Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran as the sole members remaining.
The business stated that it is currently reorganizing its board and plans to add independent members soon.
As part of a new council that would assist the promoters in nursing the company back to health, it hired TV Mohandas Pai, the former chief financial officer of Infosys, and Rajnish Kumar, the former chairman and managing director of State Bank of India, earlier this month.
Rajnish Kumar stated in an interview with Mint that they will advise Byju’s on organizational structure and governance issues, and Raveendran is obligated to take their advice into consideration.
Byju’s and its lenders announced on Monday that they had agreed to restructure the company’s $1.2 billion term loan B. The proposed change, which will go into effect before August 3rd, will handle loan acceleration, put an end to all litigation, and stop further enforcement measures, according to the statement.
According to a joint statement, “the steering committee of ad hoc term loan lenders, who collectively own over 85% of Byju’s $1.2 billion term loan, today said that they had agreed to work cooperatively towards a signed and completed term loan amendment prior to 3 August.”
“With Byju’s request for a finished loan revision, we made progress. This announcement is in line with the stated objectives to cooperate positively with Byju’s management to preserve the franchise’s worth. We are dedicated to doing our share to execute on our agreed-upon timeframe, and we look forward to finishing the loan amendment within the next two weeks,” it continued.
The declaration was made after the lenders, who were represented by Redwood Capital, forced Byju’s to go before a US court to request that loan repayment be accelerated and to seize control of the US corporation, Byju’s Alpha.
The Byju Raveendran-led startup is under increasing pressure to effectively manage its cost of capital as bondholders renegotiate the loan terms with the business despite delays in a financial filing.
In response to the lawsuit, Byju’s chose to halt interest payments on the loan until the controversy was settled but ultimately went into default.
Byju’s referred to TLB lenders as predatory in their argument and tried to bar Redwood from serving as a lender. But the issues faced by India’s most valuable startup were made worse by the resignation of its statutory auditors and non-promoter directors from its board.
The broader Indian ed-tech market and Byju’s growth prospects appear to excite investors and bondholders.
Byju’s is located at the crossroads of India and education, two crucial and vital investment sectors for the company, according to Prosus’s statement.
“Even though we no longer have a representative on the Company’s Board, we still have faith in Byju’s and its ability to revolutionize how people can access high-quality education in India and around the world.”
In order to protect the long-term interests of the Company and its stakeholders, Prosus stated it will continue to exercise its rights as a shareholder and work with other shareholders and governmental agencies.
