SUMMARY
BYJU’S founder and CEO told the employees that the disbursement of their March salaries will be delayed till April 8 and once again blamed the investors for it
In an email, Byju Raveendran said that the company is pursuing a line of credit to ensure that employee salaries are credited by April 8
The NCLT has asked the edtech giant to keep the proceeds from the rights issue in a separate escrow account
Embattled edtech giant BYJU’S has delayed the payment of salaries to its employees for the second consecutive month amid its ongoing battle with investors.
In an email sent to the employees, BYJU’S founder and CEO said the disbursement of their March salaries will be delayed till April 8 and once again blamed the investors for it.
Inc42 has accessed the email sent by Raveendran.
“A few misguided foreign investors in BYJU’S have obtained an interim order in late February which has restricted usage of the funds raised through the successful rights issue. This irresponsible action by the 4 foreign investors has compelled us to temporarily hold the disbursal of salaries until the restriction is lifted,” the founder said in the email.
It is pertinent to note that BYJU’S delayed disbursement of employee salaries for the month of February also, citing its inability to use the proceeds of the $200 Mn rights issue. Later, it reportedly cleared the salaries for a section of its employees in full and the rest in parts by March 8.
Earlier, four of BYJU’S investors – Prosus, General Atlantic Singapore, Peak XV Partners, and Sofina – moved the National Company Law Tribunal (NCLT) against the company’s decision to raise $200 Mn at a 99% valuation cut.
The NCLT asked the edtech giant to keep the proceeds from the rights issue in a separate escrow account.
In the email, Raveendran said that the company is pursuing a line of credit to ensure that their salaries are credited by April 8.
“On a positive note, we have the necessary vote to increase the authorised capital for the rights issue. It means that once the restrictions on using the raised funds are lifted, we can meet all our salary commitments immediately,” the CEO said.
Post closing the $200 Mn rights issues, BYJU’S issued a notice to its shareholders for an extraordinary general meeting (EGM) on March 29 to increase its authorised share capital.
Some of the disgruntled investors moved the NCLT seeking a stay on the EGM. However, the Tribunal refused to stay the meeting.
Last week, Raveendran told the company’s shareholders that BYJU’S board was considering an offer for its disgruntled investors to participate in its rights issue.
