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May 20, 2024

Rajnish Kumar and Mohandas Pai Exit Byju’s Advisory Council Amid Ongoing Challenges

Think & Learn Private Limited (TLPL), the parent company of Byju’s, has announced that Rajnish Kumar and Mohandas Pai will not be renewing their contracts as advisory board members after their term ends on June 30, 2024. This decision, reached mutually by both parties, marks the end of a one-year advisory period during which Kumar and Pai provided strategic guidance to the edtech giant.

In a joint statement, Kumar and Pai explained, “Our engagement with the company as advisors was always on a fixed-term basis for a year. 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.”

Byju’s has downplayed the significance of this development, emphasizing that the advisors’ departure is a routine contractual conclusion rather than a setback. The company expressed its gratitude for the contributions made by Kumar and Pai during a particularly turbulent period. “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,” said Byju Raveendran, founder and CEO of TLPL.

This announcement comes at a time of significant upheaval for Byju’s. The company has faced a series of challenges, including financial strains, delays in financial reporting, and legal disputes with lenders and investors. These issues have been exacerbated by the resignation of key figures within the organization. In June 2023, Deloitte Haskins & Sells resigned as Byju’s auditor due to delays in financial reporting. This was followed by the resignation of representatives from the company’s top investors—Prosus, Peak XV Partners, and the Chan Zuckerberg Initiative.

Prosus, a major investor, later revealed that its resignation from Byju’s board was due to the company’s executive leadership consistently disregarding strategic, operational, legal, and corporate governance advice. To fill the void left by Deloitte, Byju’s appointed BDO as its new statutory auditor for the next five years and established an advisory council, which included Rajnish Kumar, former chief of State Bank of India, and Mohandas Pai, former CFO of Infosys.

In addition to these high-profile exits, Byju’s is also navigating internal restructuring. Recently, Arjun Mohan, CEO of Byju’s India, stepped down, prompting the company to restructure its operations into three distinct divisions: the online learning app business, online classes and tuition centers, and test preparation. This reorganization aims to streamline operations and improve efficiency, with each division having its own head. However, this restructuring has also led to significant layoffs, with approximately 500 employees being let go.

Byju’s has further consolidated its operations by closing all regional sales offices across India, retaining only its headquarters at IBC Knowledge Park in Bengaluru. This move affects over 20 offices in cities such as Delhi, Gurugram, Mumbai, Pune, Hyderabad, and Chennai.

The company is also grappling with delays in salary payments to employees. These delays are linked to funds from a recent rights issue, which are currently locked in a separate account due to ongoing disputes with investors. Byju’s and its investors are entangled in a legal battle at the National Company Law Tribunal (NCLT) over a $200 million rights issue, with investors alleging mismanagement and seeking a stay on the issue.

At its peak in 2022, Byju’s employed around 50,000 people, including those in its various subsidiaries. However, a series of layoff rounds as part of the restructuring efforts have reduced the workforce to about 12,000 employees.

As Byju’s continues to navigate these turbulent waters, the departure of Rajnish Kumar and Mohandas Pai from the advisory council underscores the challenges faced by the edtech giant. Despite these setbacks, Byju’s remains committed to its mission of revolutionizing education, albeit through a significantly restructured and leaner organization.

Jhumpa Lahiri

Jhumpa Lahiri

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