Byju’s, the troubled edtech firm, is taking steps to address its current challenges by forming a Board Advisory Committee (BAC) to provide guidance to the CEO and advise on the company’s governance structure. The committee will consist of independent directors and will focus on strategic advice related to the composition of the board and the governance structure suitable for Byju’s scale and aspirations.
During a general meeting with shareholders, Byju’s CEO, Byju Raveendran, discussed the progress made in resolving various issues. He assured shareholders that the term loan B resolution, Aakash initial public offering (IPO), and the financial audits for fiscal years 2022 and 2023 are being addressed. The newly appointed CFO, Ajay Goel, informed shareholders that the FY22 audit will be completed by September, while the FY23 audit is expected to conclude by December.
Clarifications amid resignations
Raveendran also discussed the recent resignation of three board members and clarified that their departures were unrelated to Deloitte’s resignation as the company’s auditor. He emphasised that the exits were amicable and mutually agreed upon.
Regarding the ongoing term loan B dispute, Raveendran expressed confidence in achieving a positive outcome through constructive discussions without court intervention. He mentioned that the company plans to hold another meeting with shareholders in the next few weeks.
Byju’s promoters currently hold a 21 per cent stake in the company, with Byju Raveendran owning 15.90 per cent, his wife Divya Gokulnath holding 3.32 per cent, and his brother Riju Ravindran having 1.99 per cent.
Caught in a web of problems
The CEO announced the strategic decision to appoint BDO as Byju’s statutory auditors for the next five years after Deloitte’s exit due to the delay in filing the FY22 financial results. BDO has already commenced an audit of the entire group, including its subsidiaries.
The formation of the BAC aims to provide valuable input from independent directors with diverse corporate backgrounds and relevant experience. In three weeks, details regarding the committee’s members and composition will be discussed at the next shareholders’ meeting.
Byju’s management assured shareholders that negotiations with lenders for term loan B are ongoing and are expected to yield a favorable outcome. Both parties involved are motivated to avoid legal proceedings and seek a resolution beneficial to all parties.
The company’s subsidiaries, including Aakash, WhiteHat Jr, and Think & Learn, are undergoing audits, with the FY22 audit expected to be completed by September and the FY23 audit by December.
A spokesperson for Byju’s dismissed rumors of Raveendran stepping down or withdrawing from daily operations, stating that there was no discussion on potential CEO change during the general meeting.
Recent layoffs have affected approximately 1,000 employees across departments, bringing the company’s total number of job cuts to around 3,500. These actions come amidst Byju’s ongoing legal battle with lenders in the US court and the non-payment of $40 million in interest on a $1.2 billion term loan B.
(With Inputs from Reuters)
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