Ravindran and Family Evicted from Baiju’s: Financial Mismanagement Leads to Decision
According to sources close to the matter, Edelweiss Financial Services has removed the company’s founder-CEO Ravindran Baiju, his wife Divya Gokulnath, and brother Riju Ravindran from the board. This decision was taken during an Extraordinary General Meeting (EGM) held on Friday, February 23.
As per sources familiar with the situation, many blue-chip investors such as Prosus, General Atlantic, and Peak XV voted during the EGM to remove Ravindran and his family. Ravindran and his family were absent from the EGM, and the voting was reportedly conducted irregularly.
Around 60% of the shareholders, who hold significant stakes in the company, voted to push for changes in leadership and governance within the company. Ravindran and his family were also reportedly found guilty of irregularities during the EGM and voting process. Ravindran and his family were not present at this meeting.
Ravindran and his family collectively hold approximately 26% of the shares in the company. The decision to remove them was taken by the investors due to the mismanagement and failures under Ravindran’s leadership. Shareholders holding over 30% of the shares participated in the EGM. Ravindran and his family’s stake in the company amounts to around 26%.
During the EGM, the investors passed resolutions to bring improvements in leadership, restructure the board, and initiate forensic investigations into governance violations.
According to sources, the current board has been removed due to financial irregularities, misuse of the company’s legal powers, management failures, reduction in value, and concealing information. The decision was made by the investors during the EGM, which lasted for about 4 hours. However, the results of the Friday vote won’t be implemented until March 13. On that day, the Karnataka High Court will hear arguments on Ravindran’s plea challenging the admonition by some investors.
On February 21, the High Court rejected an appeal by Bayju’s shareholders to stop the EGM convened by the investors. In their submissions, the investors also stated that they are planning to file their case in the Karnataka High Court.
Earlier, a group of four of Bayju’s investors had filed a case against the company’s management for alleged mismanagement and irregularities at the National Company Law Tribunal (NCLT) in Bangalore. The investors requested NCLT to declare the company’s founder and CEO, Ravindran Bayju, and others unfit to run the company and appoint a new board.
Along with this, the company is being urged to conduct a forensic audit and to cancel the rights issue. According to media reports, the organizers of the meeting were given an additional two hours to identify authorized participants. Bayju’s sources indicated that there were technical issues during the Extraordinary General Meeting (EGM), which started at 9 am and lasted for about four hours.
Bayju’s spokesperson stated, “We have no information about any application filed with the NCLT. The company does not comment on rumors. If any such application is filed, it will be responded to according to the law and due process.”
The Enforcement Directorate (ED) has reportedly issued a lookout circular against Bayju’s co-founder and CEO, Ravindran Bayju. The ED wants to ensure that Bayju does not leave the country. This information has been provided in a report by the Economic Times.
The Enforcement Directorate (ED) is investigating Bayju’s under the Foreign Exchange Management Act (FEMA). Earlier, three months ago, the Enforcement Directorate had also issued a notice of ₹9,000 crore to Bayju’s co-founder Ravindran Bayju and Think & Learn Private Limited.
According to the ED, Bayju’s had declared that they had conducted transactions outside India, which allegedly violates the provisions of FEMA 1999. This has reportedly caused financial loss to the Indian government by violating the provisions of 1999.
Bayju’s losses have surged to ₹8,245 crore in 2022, significantly higher compared to ₹4,564 crore in the financial year 2021. This indicates a nearly doubled loss for the company during this period. The total revenue of the company stood at ₹5,298 crore, witnessing a remarkable increase of 118% from ₹2,428 crore in 2021.
Think & Learn, the parent company of Bayju’s, has submitted its audited financial statement to the Registrar of Companies. Almost half of the losses (approximately ₹3,800 crore) are attributed to WhiteHat Jr. and Osmo, among other companies. These two major acquisitions by the company have contributed significantly to the losses.
During the challenging times, Bayju’s has faced three major issues:
- The Board of Control for Cricket in India (BCCI) has initiated proceedings against Bayju’s for alleged default in payment amounting to ₹158 crore.
- The Enforcement Directorate (ED) has issued notices of over ₹9,000 crore for violations of the Foreign Exchange Management Act (FEMA), which was established in 1999 to regulate foreign exchange transactions.
- Employees at the Gurugram office were laid off due to failure to pay rent. Their laptops were confiscated as part of the process.
