9 Shocking Revelations About Byju Raveendran's Downfall

1. What led to Byju Raveendran's ouster from Byju's?

Byju Raveendran was ousted from Byju's in an emergency meeting called by the shareholders in late February 2024. This move was part of a series of calamities for the company, including the U.S. arm filing for bankruptcy and Raveendran mortgaging his home to pay salaries.

2. What triggered the insolvency proceedings against Byju's?

The Board of Control for Cricket in India (BCCI) filed for insolvency proceedings against Byju's due to unpaid sponsorship dues of $19 million related to the Indian cricket team's jerseys. Despite Byju's attempts to settle the matter, the tribunal ruled in favor of the BCCI, appointing a resolution professional and suspending Byjus board of directors.

3. How did investors react to Byju's financial mismanagement?

Major shareholders, including tech investor Prosus, voiced concerns about financial mismanagement and called for the removal of CEO Byju Raveendran. In June, Prosus wrote off its entire 9.6% stake in Byju's, becoming the first to fully divest from the troubled startup.

4. Why did Deloitte resign as auditor for Byju's?

Deloitte resigned as auditor due to delayed financial statements for the year ending March 31, 2022. Despite several letters to the board, Deloitte did not receive the necessary documents, leading to their resignation.

5. What are the key challenges facing Byju's today?

Byju's is grappling with several challenges, including debt non-payment, declining student enrollment rates, and poor public perception. The company is also engaged in legal battles regarding debt restructuring plans and faces significant tax issues.

6. How is Byju Raveendran managing the crisis?

Despite the company's financial struggles, Byju Raveendran maintains firm control, backed by his board. He is undertaking a massive restructuring process, including cutting non-essential costs and exploring alternative revenue streams.

7. What is the impact on Byju's employees?

The fate of Byju's employees now lies in the hands of the Committee of Creditors (CoC). They may choose to retain or terminate staff based on the company's financial status. Former employees who are owed dues will need to approach the resolution professional.

8. How has Byju's valuation plummeted?

Byju's valuation has plummeted from about $22 billion to less than $2 billion. This drastic drop is attributed to various internal and external issues, including financial mismanagement, lack of innovation, and poor corporate governance.

9. What does the future hold for Byju's?

The future of Byju's is uncertain. The company is undergoing a significant restructuring process, and its ability to bounce back depends on successful negotiations with creditors and changes in the education market. A Committee of Creditors will determine the company's future within a maximum period of 330 days.