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ED lookout notice for Byju’s founder, investors firm on ouster meet

Byju’s had claimed that any resolutions proposed during the “illegal” meeting will be deemed invalid till the final hearing and disposition, according to the court order.
Last Updated 22 February 2024, 05:47 IST

Bengaluru: The Enforcement Directorate has requested the Bureau of Immigration to issue a lookout circular against Byju Raveendran, the founder of embattled edtech firm Byju’s, in relation to alleged violations of the Foreign Exchange Management Act (FEMA) involving funds to the tune of Rs 9,362 crore.

The LOC can significantly hinder Raveendran’s movements outside the country, and the ED would be informed of any such attempts.

This comes a day after Byju’s in a media statement claimed that the Karnataka High Court had ruled in favour of a petition Byju’s had filed to stall an Extraordinary General Meeting a group of its investors are planning to hold on Friday.

However, one of the investors told DH on condition of anonymity that the meeting will go ahead as planned. Byju’s had claimed that any resolutions proposed during the “illegal” meeting will be deemed invalid till the final hearing and disposition, according to the court order.

The ruling instead stated that any decisions taken during the EGM will not come into effect until the next hearing, which will be held on March 13, as per court documents viewed by DH.

The court order has not deterred investors, which include bigwigs like PeakXV, Sofina and Chan Zuckerberg, from holding the EGM, which will go as planned on February 23, according to sources in the know.

The main goal of the EGM, which is to remove Raveendran as CEO and chairman of the company, will likely be favoured by a majority of participants, the sources added. The agenda also includes voting to remove his wife Divya Gokulnath and brother Riju Raveendran as directors.

The investor consortium also believes that it was misleading for Byju’s to claim that the court has invalidated the resolutions that will be taken during the EGM or called it illegal. Byju’s in its petition had claimed that the EGM goes against Section 100(3) of the Companies Act, 2013 and the conditions of holding the meeting did not comply with existing laws.

The company on Thursday re-emphasised that holding the EGM is “structurally invalid” and goes against its Shareholder’s Agreement and Articles of Association (AOA), due to which Raveedran and his family members will not attend it.

“This means the EGM, if it is still summoned, will not have the required quorum and cannot proceed to discuss or vote on the agenda,” it added. Investors sources cited above have, however, denied this statement to be true.

Raveendran and his edtech empire have been under the ED’s radar since last year, when it had sent show cause notices to him and Byju’s parent company Think & Learn Pvt Ltd. The agency had also raided his home and office spaces, where it is said to have found incriminating documents. The ED suspects the company violated FEMA rules while receiving foreign investments and remittances and overseas investments it made, causing material loss to the state exchequer.

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(Published 22 February 2024, 05:47 IST)

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