What’s the news: Despite considerable growth, Byju’s reporting and governance structures did not evolve sufficiently over time for a company of that scale, said global investor Prosus in a press release explaining the company’s exit from Byju’s Board of Directors in June 2023.
Prosus’s statement, issued on July 25, finally breaks the company’s silence on why it’s representative, Russel Dreinstock stepped down from the Board of Directors of Byju’s, a company Prosus has invested in since 2018. Two other non-promoter directors GV Ravishankar, representing Peak XV (formerly Sequoia India) and Vivian Vu representing Chan Zuckerberg Initiative, also left the Board around the same time, reported Livemint.
“Despite repeated efforts from our Director, executive leadership at Byju’s regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters. The decision for our Director to step down from the Byju’s Board was taken after it became clear that he was unable to fulfil his fiduciary duty to serve the long-term interests of the Company and its stakeholders,” said Prosus.
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Why it matters: Byju’s is one of India’s most popular ed-tech companies. However, this year has dealt many a blow to the company. At least 1000 employees have been laid off, and Deloitte also backed out as the company auditor. Meanwhile, Prosus notes in its annual report that reducing Byju’s valuation and losing influence over Byju’s financial and operating policies has profited the company by US$22 million. Now, Byju’s owner Byju Raveendran, his wife, Divya Gokulnath, and brother Riju Raveendran as the only board members left.
Prosus remains a shareholder in the company: While Dreinstock may have left the Board, Prosus continues to hold a 9.6 percent stake in the company. As such, Prosus said it will continue to assert its rights and collaborate with other shareholders and government authorities to safeguard the long-term interests of the Company and its stakeholders.
“Byju’s sits at the intersection of India and Education, two very important and strategic areas of investment for Prosus. Although we no longer have a representative serving on the Board of the Company, we continue to believe in the potential of Byju’s and its role in revolutionising access to quality education in India and around the world,” it said.
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