Four investors of Byju’s have filed an ppression & mismanagement suit against the management of the company at the NCLT’s Bengaluru bench.
This was done in order to declare the founders as unfit to run the company, appoint a new board, declare the rights issue as void, conduct a forensic audit, among other reliefs.
The suit includes concerns regarding financial mismanagement by the founders leading to losing control of Aakash, Byju’s Alpha (TLB loan) default, non-hiring of CFO and independent director, oppressive nature of the $200 million rights offer, regulatory non-compliances and more.
The petition has been signed by four investors – Prosus, GA, Sofina, and Peak XV along with support from other shareholders including Tiger, Owl Ventures.
Earlier, Byju’s rights issue to raise $200 million at a valuation cut of 99 percent has been fully subscribed, founder and CEO Byju Raveendran said in a shareholder letter.
Read More: Byju’s rights issue to raise $200 million fully subscribed
The company’s founder is set to put $45-$46 million in rights issue to preserve his shareholding in the company. According to people close to developments, some late stage investors who came in later rounds of funding are also keen to join the issue.
Byju’s founder Byju Raveendran and the company’s other board members, which include his wife, Divya Gokulnath, and brother, Riju Raveendran, won’t attend the extraordinary general meeting (EGM) called by the company’s investors on February 23 to oust the top management.