Byju’s crisis: Rajnish Kumar, TV Mohandas Pai to step down from advisory panel

Byju's crisis: Former State Bank of India chief, Rajnish Kumar, and former chief financial officer at Infosys, TV Mohandas Pai, have decided to not renew their contracts to be part of beleaguered edtech firm Byju’s’ advisory panel. Kumar and Pai’s one-year tenure ends on June 30, after which they wish to exit the advisory panel. 

Rajnish Kumar and TV Mohandas Pai have communicated their decision to Byju’s founder Byju Ranveendran, according to a report on Livemint. Their departure comes after a series of board exits and financial woes that pushed the company into legal battles.

The two veteran executives were part of the advisory panel that Byju’s had established to assuage investors who were worried about the company’s future amid mounting legal troubles. 

According to the report that quoted an unnamed executive, the reason both Pai and Kumar want to exit Byju’s is because of the multiple lawsuits that the company is facing in both India as well as the US from its creditors and key shareholders. The creditors and shareholders want Byju Raveendran ousted for mismanagement. 

The focus areas of the panel were three-pronged – to get Byju’s to disclose its lauded financials, help Raveendran rebuild the team, and better communication with shareholders. The executive, as per the report said, Byju’s started off strong but then got embroiled in all kinds of litigation. The advisory board reportedly also worked with Raveendran to expand the board and change the composition of the board committee. 

BYJU’S STATEMENT

Byju Raveendran said that the plans they had were delayed due to the litigations but he would always rely on the advice by Pai and Kumar. “Rajnish Kumar and Mohandas Pai have provided invaluable support in the past year. The ongoing litigations by a few foreign investors have delayed our plans but their advice will be relied upon in the ongoing rebuild which I am personally leading,” he said in a statement.

Kumar and Pai said in a statement on late Sunday: "Based on our discussions with the founders, it was mutually decided that the tenure of the advisory council should not be extended. Though the formal engagement concludes, the founders and the company can always approach us for any advice. We wish the founders and the company the very best for the future.” Their engagement with Byju’s was reportedly always on a fixed-term basis.

BYJU’S CRISIS

Once one of the brightest startups, valued at $22 billion in 2022, Byju’s valuation was slashed to $1 billion by Blackrock, an investor in the company. Meanwhile, another investor Sequoia Capital (now Peak XV Partners) has written off its investment. 

Byju’s troubles escalated after GV Ravishankar of Peak XV Partners, Vivian Wu of Chan Zuckerberg Initiative, and Russell Dreisenstock of Prosus stepped down from its board due to poor corporate governance. Deloitte, Byju’s statutory auditor, also resigned due to delays in the details that the company had to provide. 

Amid all the chaos, Byju’s laid off thousands of employees, and paid delayed salaries. Its chief executive Arjun Mohan also stepped down. 

There are multiple insolvency proceedings before the National Company Law Tribunal against Byju’s. Last month, Byju’s shareholders approved a a $200-million rights issue, but it cannot use the funds till the court hearings are concluded.