Byju's Faces Investor Backlash: EGM Called for Founder's Removal Amidst US Unit's Bankruptcy

A group of investors, including Prosus, General Atlantic, and Chan Zuckerberg, demand changes in Byju's leadership, citing governance and financial concerns. Simultaneously, Byju's US unit files for Chapter 11 bankruptcy, revealing significant liabilities.

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In a bid to address governance and financial concerns, investors, including Dutch firm Prosus, have initiated an extraordinary general meeting (EGM) for Byju. The group, comprising General Atlantic, Chan Zuckerberg, Peak XV, Sofina, Owl, and Sands, holds a collective 30% stake in the edtech giant. Their resolutions include removing founder control, reconstituting the Board of Directors, and changing company leadership.

The EGM notice emphasizes the urgency to resolve outstanding governance and financial issues and shift control away from the founders. Despite previous requests for board meetings in July and December, Byju reportedly disregarded the concerns raised by a consortium of shareholders.

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Simultaneously, Byju's US subsidiary has filed for Chapter 11 bankruptcy in Delaware, listing liabilities between $1 billion to $10 billion and assets between $500 million to $1 billion. This move comes amidst challenges, including bankruptcy proceedings initiated by lenders and negotiations for a $1.2 billion term loan repayment. These setbacks collectively contributed to the US unit's bankruptcy filing.

Byju's, as of now, has not provided any response to queries regarding these developments.