A majority of Byju’s investors voted to remove founder Byju Raveendran

In a surreal moment for the startup, once India’s most valuable startup, Byju’s investors voted on Friday to remove the Chief Executive and the founder, Byju Raveendran.

The investors, including Prosus Ventures and Peak XV Partners, who collectively owned more than 60% of Byju’s, also filed a lawsuit accusing the company’s leadership of oppression and mismanagement. The shareholders passed resolutions to reconstitute Byju’s board and change its leadership. Byju Raveendran and other Board members did not attend the meeting. Byju’s had earlier claimed that shareholders lacked the voting rights to make leadership changes.

A statement from the shareholder group, supported by Prosus, confirmed the passing of resolutions at the meeting and their intention to present the outcome to the Karnataka High Court. Separately, four investors owning about 25% of Byju’s filed a suit at the National Company Law Tribunal to halt a rights issue.

This development follows over a year of unrest among Byju’s investors, who criticise the startup’s handling of accountability. Byju’s, valued at $22 billion, faced challenges in going public through a SPAC deal and has been seeking funding for more than a year. The company’s attempts to raise funds last year faced setbacks, and it ended up raising less than expected amounts through a debt offering. Recently, Byju’s launched a rights issue to raise $200 million, which was reportedly fully subscribed.

In response, Byju’s questioned the legitimacy of the resolutions, claiming that only a small group of shareholders attended the meeting and labelling their decisions as “invalid and ineffective.” The startup, founded a decade ago, expressed the need for the rights issue to prevent permanent value erosion.