In an official statement, Prosus highlighted that the resignation of its director, Russel Dreseinstock, from BYJU’S board was driven by the realization that he could not fulfill his fiduciary responsibility to prioritize the company’s long-term interests and those of its stakeholders.
In summary:
- Peak XV owns approximately 7 percent stake in BYJU’S.
- Prosus holds around 9 percent stake in the edtech firm.
- Both investors expressed that BYJU’S management was resistant to following their advice.
Peak XV Partners, formerly known as Sequoia Capital India, has issued a letter to its Limited Partners (LPs) elucidating the reasons behind the resignation of GV Ravishankar, a member of the venture capital firm, from the board of the edtech company BYJU’S.
The VC fund, being the second-largest institutional shareholder in the edtech company, informed LPs that GV Ravishankar’s decision to resign from BYJU’S board was a result of the company’s insufficient transparency in providing business updates and information to investors.
“The letter addressed to LPs stated that the devaluation of their investments was a consequence of the VC fund’s limited access to BYJU’S current audited financials and their inability to influence the company to implement necessary corrective actions.
Additionally, they expressed that BYJU’S management was unresponsive to the advice given by Peak XV’s representative on the board.”
On Tuesday, similar allegations were raised by the Netherlands-based venture capital investor, Prosus. In an official statement, the VC fund explained that its director, Russel Dreseinstock, chose to resign from the BYJU’S board as it became evident that he couldn’t fulfill his fiduciary duty to prioritize the company’s long-term interests and those of its stakeholders.
Moreover, Prosus asserted that the executive leadership of the edtech company frequently disregarded advice and recommendations provided by Prosus representatives, covering strategic, operational, legal, and corporate governance matters.
In their statement, Prosus stated, “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 their Director to step down from the BYJU’S Board was made after it was apparent that he couldn’t fulfill his fiduciary duty to serve the long-term interests of the company and its stakeholders, they further added.
Peak XV also mentioned their intention to devalue their investment in the company.
The letter stated, “We are planning a substantial write-down of our investment in the company in the upcoming reporting cycle.”
