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Monday, June 24, 2024

Byju’s Cannot Pay Salaries Due To Rights Issue Money Stuck In Different A/C During Investor Argument

<p>Byju Raveendran, the founder of Byju, said on Saturday that the edtech business would be unable to pay staff wages since the money generated via a rights issue is unavailable because of a legal disagreement with certain investors.</p>
<p><img decoding=”async” class=”alignnone wp-image-469434″ src=”https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-byjus-cannot-pay-salaries-due-to-rights-issue-money-stuck-in-different-ac-during-i.jpg” alt=”theindiaprint.com byjus cannot pay salaries due to rights issue money stuck in different ac during i” width=”944″ height=”629″ title=”Byju's Cannot Pay Salaries Due To Rights Issue Money Stuck In Different A/C During Investor Argument 9″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-byjus-cannot-pay-salaries-due-to-rights-issue-money-stuck-in-different-ac-during-i.jpg 510w, https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-byjus-cannot-pay-salaries-due-to-rights-issue-money-stuck-in-different-ac-during-i-150×100.jpg 150w” sizes=”(max-width: 944px) 100vw, 944px” /></p>
<p>Raveendran said in a staff letter that the rights problem, which was initiated one month ago, has been effectively resolved.</p>
<p>“This was meant to be a joyous exchange of letters. After all, we now have enough money to pay off our debt and cover our immediate necessities. I hate to notify you, however, that we will still be unable to process your wages,” he said.</p>
<p>In the letter that PTI obtained, Raveendran said that the business is still making every effort to guarantee that wages are paid by March 10.</p>
<p>“We will make these payments as soon as we are legally able to,” he said.</p>
<p>Furthermore, Raveendran said that “now we are experiencing a delay despite having funds” in reference to the difficulties the firm had last month as a result of a shortage of funding.</p>
<p>“We are unable to use the funds raised to pay your hard-earned salaries, unfortunately, because a select few (4 out of our 150+ investors) have stooped to a heartless level,” Raveendran said.</p>
<p>“The funds raised through the rights issue are currently locked in a separate account at their request,” he said.</p>
<p>Even though these particular investors had made significant gains from their investment in Byju’s, Raveendran accused them of showing a callous disdain for the lives and livelihoods of others.</p>
<p>The painful truth is that a few of these investors have already achieved significant returns; in fact, one of them has increased their investment in BYJU’S by an astounding eight times. In the letter, he said, “Yet, their acts show a callous disregard for our lives and livelihoods.”</p>
<p>According to Raveendran, he has battled bravely and nonstop, “leaving no stone unturned,” in an effort to uphold the company’s duty to its workers.</p>
<p>“Many hours have been devoted to investigating every option, coordinating with our legal teams, and defending your rights. But in spite of all we have tried, we have to face the heartbreaking truth that we are not yet able to provide you the financial help you need,” he said.</p>
<p>The beleaguered edtech company was asked earlier this week by a company law court to think about extending the deadline for the USD 200 million rights issue. The management had indicated that it would not approve the request, despite the fact that disgruntled investors had pointed out technicalities that prevented the issue from closing on Wednesday.</p>
<p>The National Firm Law Tribunal (NCLT), Bengaluru Bench, said in an interim ruling dated February 27 that the money the firm had received in relation to the rights issue should be held in a separate escrow account and should not be removed until the problem has been resolved.</p>
<p>The date of the next hearing is set for April 4.</p>
<p>The exclusive group of Byju’s investors claimed that the edtech behemoth embezzled USD 533 million from a little-known US hedge fund and had requested a halt on a USD 200 million rights issuance, claiming that this was unlawful and against the law.</p>
<p>Due to alleged “mismanagement and failures” at what was once India’s hottest tech startup, Byju’s shareholders (notable investors) voted unanimously last month to remove Founder-CEO Raveendran and his family from the board in a high-stakes corporate drama. However, the company retaliated, claiming that the voting conducted without the founders’ presence was invalid and ineffective.</p>
<p>More than 60% of shareholders voted in favor of all seven resolutions at the EGM, which included replacing the current management, reorganizing the board, and conducting a third-party forensic investigation into the company’s acquisitions, according to sources close to the investors.</p>
<p>The once-famous ed-tech business Byju’s reached incredible heights prior to experiencing a string of disappointments.</p>
<p>While Byju was financially strained in the wake of the pandemic and the recent acquisition of Aakash, the edtech company also faced other problems in the past year, such as the resignation of its auditor, the filing of bankruptcy by lenders against a holding company, and a lawsuit in the US contesting the conditions and repayment of a loan.</p>

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