The National Company Law Tribunal of India, shortly known as NCLT, has allowed Byju to conduct its Extraordinary General Meeting (EGM). It would be a great opportunity for the world’s most renowned ed-tech startup as it is looking forward to accumulating funding through its rights issues worth $200 million. In the EGM, several crucial decisions are expected to be taken that will prove critical for the company’s future and further progress. Also, it will enable Byju to navigate through its legal battle.
Byju’s Struggles
Byju’s was once the most valued startup in India that has taken the world by storm with its services and offerings. However, it has been facing challenges for the past few years regarding its leadership and governance of corporate rights. In a recent poll, numerous investors shared their thoughts about removing Byju Raveendran from the company as he is performing his roles as the founder and chief executive of Byju’s.
Moreover, the company has planned to expand its services and authorized shared capital as per the information revealed by TechCrunch. Ultimately, it will help it to manage the rights issues. Nevertheless, it is not easy to handle these important things at once.
Court Hearings
The NCLT has turned down the request to ban Byju’s EGM making sure that the company can move forward with its capital-raising efforts. In this way, it can generate enough money that prove beneficial for the rights issues problems. A grand sum of $200 million has already been collected as numerous investors and Reveendran himself paid a solid share. One important point to consider is that the lawyers have warned the company that if the share capital is increased, it can’t be reversed in any case. NCLT has announced that the next case hearing will be done on April 4.
Karnataka High Court has also been involved in the decision. However, the court has made a clear statement that it will only hear the case which is associated with the investors who are requesting to remove Raveendran as a founder and CEO of Bujy’s. Additionally, the date will be given after two months. These two different cases have made the condition and this legal battle more sturdy and complex.
Implications
Byju’s is proceeding further to organize its EGM, which is a positive step toward the development and growth of this high-end ed-tech startup. Also, it will enable the company to generate more funding. The $200 million rights issue has impacted Byju’s finances massively and is expected to support its growth plan in the future. Raveendran and other investors are pretty hopeful to receive positive outcomes from their investment as well as from EGM as it will ultimately decide the further procedures for the enterprise.
