Byju’s is asking three global investors to reconsider their decision to resign from its board, reported Reuters citing three sources with direct knowledge of the situation. The investors, who represent Peak XV Partners (formerly known as Sequoia Capital India), Prosus, and Chan Zuckerberg Initiative, reportedly resigned from the edtech firm’s board without providing a specific reason. The move is being considered another blow to $22 billion start-up.
The news of their departures coincided with the report of Deloitte resigning as Byju’s auditor. The resignation was due to Byju’s delay in submitting financial statements for the year 2021-22 and failure to provide requested documents despite repeated requests from the auditor.
Byju’s leadership is in talks with the investors to try to convince them to reverse their decision, the three sources told Reuters.
Byju’s has dismissed reports of the board members’ resignations as mere “speculation.” The company asserts that it will provide the necessary disclosures when the appropriate time arises.
Byju’s, the online tutorial provider, saw a significant surge in popularity during the COVID-19 pandemic. This remarkable growth was viewed as a positive development for India’s startup ecosystem, attracting substantial investments from notable backers such as General Atlantic.
Also Read: Ministry Of Corporate Affairs Ordered Inspection Into Byju’s: Report
Two of the sources told the news agency that the investors took the decision collectively to resign from the board as they were not getting answers from Byju’s founder and senior management.
Byju’s is currently facing legal disputes in the United States concerning the restructuring of a $1.2 billion loan, involving the company and its lenders. Concerns have been raised by investors in recent months regarding audit delays and the company’s handling of matters concerning its lenders, the report said.
As a consequence of the board departures, the composition of Byju’s board now consists solely of its founder and chief executive, Byju Raveendran, along with his wife Divya Gokulnath, and brother Riju Raveendran.
