Peak XV Partners, erstwhile Sequoia Capital India, has sent a letter to its Limited Partners (LPs) explaining the rationale behind the VC firm's GV Ravishankar decision to resign from the board of edtech company BYJU'S.
The VC fund, which is the second-biggest institutional shareholder in the edtech company, told LPs that Ravishankar’s move to step down from the edtech’s board was due to BYJU'S lack of transparency in providing business updates and information to investors.
“The marking down of our investments reflects our lack of visibility into BYJU’S up-to-date audited financials and our inability to influence it to take corrective measures,” the letter to LPs read.
They further added that BYJU’S management was unwilling to adhere to the advice provided by Peak XV’s representative on the board.
Similar claims were made by Netherlands-based venture capital investor Prosus on Tuesday. In an official statement, the VC fund noted that the decision of its director Russel Dreseinstock to step down from BYJU’S board was prompted after it became clear that he was unable to fulfil his fiduciary duty to serve the long-term interests of the company and its stakeholders.
They added that executive leadership at the edtech company frequently disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters provided by Prosus representatives.
Prosus’ statement read, “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 our Director to step down from the BYJU’S Board was taken after it became clear that he was unable to fulfil his fiduciary duty to serve the long-term interests of the Company and its stakeholders,” they added.
Peak XV also highlighted that they plan on marking down the valuation of their investment in the company.
“We plan on significantly writing down our investment in the company in the coming reporting cycle,” the letter stated.