Karnataka HC extends interim protection against Byju’s EGM resolution till March 28

The Karnataka High Court on Wednesday extended till March 28, its interim order asking Byju’s shareholders not to bring in effect any resolutions passed during the February 23 extraordinary general meeting (EGM).

As earlier reported, on February 23, a host of blue chip investors like Prosus, General Atlantic and Peak XV had voted for ouster of founder-CEO, Byju Raveendran from the company. However, the resolution could not be given effect owing to the Karnataka High Court’s interim order.

During a brief hearing on Wednesday, the investors alleged that Byju’s had obtained this interim order by fraud while Raveendran alleged that the investors had committed perjury as there are discrepancies with respect to the date on which the affidavit attached to the statement of objections were filed. However, the court directed Byju’s to put their allegations in writing, if they want the court to take notice of it.

The case was thus adjourned after Byju sought time to file a response to the objections filed by investors.

On February 21, Byju’s filed a petition under Section 9 of the Arbitration and Conciliation Act, asking the court to restrain its shareholders from holding the EGM on February 23. While the HC refused to stay the EGM, it asked the investors not to give effect to any resolution passed in the case till March 13.

Among investors who had called the EGM include General Atlantic, Chan Zuckerberg Initiative, MIH EdTech Investments, Own Ventures, Peak XV Partners (formerly Sequoia Capital India & SEA), SCI Investments, SCHF PV Mauritius, Sands Capital Global Innovation Fund, Sofina, and T Rowe Price Associates.

Amidst the case being pending in the Karnataka High Court, some of the investors approached the National Company Law Tribunal (NCLT) against Byju’s rights issue. While the NCLT has not passed any order on the rights issue, it asked the firm to keep the proceeds in an escrow account. It also asked Byju’s to consider extending the last date so that the rights of the investors were not affected.