The ED Directorate has issued a look-out notice against CEO Byju Raveendran for Foreign Exchange Management Act (FEMA) violations. Raveendran is now unable to leave the country.
The Enforcement Directorate issued a look-out notice against CEO Byju Raveendran for FEMA irregularities. No longer can Raveendran leave the nation.
The Enforcement Directorate (ED) issued a look-out warning for FEMA violations against Byju Raveendran, founder and CEO of crisis-hit edtech company Byju’s. Lookout restricts Ravindran’s movement. He cannot leave the country.
Select investors of Think and Learn Pvt Ltd, BYJU’s owner, held an emergency shareholder meeting on Wednesday to oust Raveendran and his family from leadership. Karnataka High Court denied to stay the meeting
The High Court refused Byju’s request to suspend the EGM, ruling that any resolution voted on at the EGM cannot be enforced until the next court hearing.
“It is further submitted that the conditions for convening the Extraordinary General Meeting (EGM) are not complied and no notice is issued as contemplated under Section 100 (3) of the Companies Act 2013,” read the judgment.
It said “the decision, if any taken by the shareholders of the petitioner company in the EGM scheduled on February 23, 2024, shall not be given effect to, till the next date of hearing,” said.
Select Byju’s shareholders have called for an EGM on February 23 to demand a leadership change and cite various operational discrepancies.
General Atlantic, Peak XV, Sofina, Chan Zuckerberg, Owl, and Sands—30% of Byju’s—supported the notice.
“The Karnataka High Court, in response to a petition by Think & Learn Pvt Ltd (the parent company of BYJU’S), has passed an order stating that any resolutions proposed to be passed in the 23rd February EGM called by select investors as invalid until the final hearing and disposition of this petition,” Byju’s tweeted.
Byju’s petitioned the court, claiming that 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 had violated the AoA, SHA, and Companies Act, 2013 by calling
The court’s decision to annul the EGM resolutions and grant BYJU’S immediate remedy reflects its dedication to Byju’s best interests and corporate governance. According to Byju, the verdict gives the firm stability and concentrate, protecting stakeholders.
Investor sources said the court did not nullify the resolutions. EGM will vote to dismiss Byju as CEO, source says.
EGM can proceed despite court order. The insider anticipates majority investors to vote for CEO removal.
Byju wrote to shareholders earlier in the day to urge USD 200 million rights issue investment. The rights offer was fully subscribed, he said.
Conclusion
FEMA violations earned CEO Byju Raveendran a look-out circular from the Enforcement Directorate. Raveendran cannot remain abroad. Several Think and Learn Pvt Ltd shareholders sought an emergency shareholder meeting to oust Raveendran and his family from Byju’s leadership. The Karnataka High Court continued the meeting. Provisional relief was granted that EGM resolutions cannot be implemented until the next court hearing.
