In another positive development around embattled ed-tech platform BYJU's after founder Byju Raveendran decided to take the lead role to steer the troubled startup out of crisis, the company says the vote to increase its authorised share capital has been approved by a majority of 55% of the total votes polled, as per the scrutiniser report.

Citing an independent third-party report, which scrutinised the voting process, BYJU's says the approval of the EGM proposals paves the way for Think & Learn Private Limited, the parent company of BYJU'S, to "issue fresh shares and conclude the rights issue aimed at tackling the liquidity crunch, including unpaid salaries, regulatory dues and vendor payments".

The company has attributed these delays to "irrational hostility" from four foreign shareholders, who it said chose "frivolous litigation over constructive discussion".

Notwithstanding the approval of the voting process by the third-party scrutiniser, the tribunal court National Company Law Tribunal (NCLT) has restricted the use of these funds by the ed-tech company.

The NCLT, in its previous order, on a petition filed by four foreign shareholders, had instructed the company to hold the funds received from the rights issue in an escrow account for now. The next hearing on the matter is scheduled for April 23.

“We are grateful to our investors for their support and understanding during this pivotal phase. Their invaluable support in providing essential working capital underscores their collective commitment to our renewed growth push,” says Byju Raveendran, founder and CEO of BYJU’S. “The shareholder approval marks a significant threshold in our relentless push to turn around the business beset with multiple challenges, which we are resolving one by one, slowly but surely,” he adds.

The company says an independent scrutiniser evaluated the process, which was as per the applicable laws, ensuring "transparency and fairness". “While the successful rights issue provides BYJU'S with the necessary financial resources, the company is currently unable to utilise the proceeds.”

On February 21, 2024, BYJU's $200 million rights issue had been fully subscribed. However, Raveendran had said some investors had decided not to participate in the issue. The $200 million raise is aimed at giving BYJU's the capital it needs to ensure it can take care of the current liabilities and provide growth capital. BYJU's had floated the issue in January 2024 at a valuation of $220-250 million, a whopping 99% down from 2022 when the company was valued at $22 billion.

Additionally, BYJU's India unit CEO Arjun Mohan has exited the company less than six months after joining and will now transition to an external advisory role. To take the company out of the crisis, founder Byju Raveendran says he will spearhead the daily operations at BYJU's India. The top-level exit and Raveendran's decision to lead the operations of BYJU's India unit seem to be aimed at re-energising the company badly hit by recent episodes.

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