Troubled edtech startup BYJU’S, which is facing an acute capital crunch, has not deposited the provident fund (PF) in the EPFO accounts of its employees since August this year despite deducting the amount from their salaries, sources told Inc42.
Data sourced from the EPFO portal confirmed these claims. As per EPFO data, BYJU’S last credited PF for 23,533 employees for the months of May and July in August this year.
“When I asked for clarification, they simply said they have processed the amount but there is a technical glitch. None of the employees have received the EPF/VPF amount since August of 2023,” said one of the sources mentioned above.
The company deposited a PF amount of INR 63.8 Cr for the first six months of 2023 as against INR 200.6 Cr for the entire 2022.
It is pertinent to note that BYJU’S has laid off thousands of employees since 2022 as part of its efforts to cut costs. This has led to dissatisfaction within the employees, and now, the decision to withhold PF payments has only added to the disgruntlement, as per the sources.
An email sent to BYJU’S seeking comments on the development didn’t elicit any response till the time of publishing this story.
A source close to the company told Inc42 that BYJU’S is trying to fix the issue at the earliest but refused to give any deadline for it.
This is not the first time that BYJU’S has been accused for being late in crediting the PF amount to the EPFO portal. Earlier this year, the company deposited the PF payments of its employees, which were pending for months, after being directed by the EPFO to do so.
The Precarious State Of BYJU’S
Earlier this week, it was reported that BYJU’S failed to clear the November salaries of about 1,000 employees due to an “unexpected technical glitch”. However, hours after the matter came to light, BYJU’S said it cleared the pending salaries.
Meanwhile, the situation at the company, which is involved in a legal battle with its $1.2 Bn Term Loan B lenders, is so dire that founder Byju Raveendran has reportedly pledged two houses of his family and an under-construction villa to borrow $12 Mn to pay employee salaries.
Besides this, the startup has also reduced the notice period for existing employees to save costs. In September this year, Inc42 also reported that BYJU’S planned to sack around 4,000 employees as part of its newly appointed India CEO Arjun Mohan’s plan to bring the business back on track.
Recently, the Board of Control for Cricket in India (BCCI) also dragged the edtech giant to the National Company Law Tribunal (NCLT) for a pending payment of about INR 158 Cr.
The startup has also received a show cause notice from the Enforcement Directorate (ED) for alleged FEMA violations to the tune of INR 9,000 Cr.
As per reports, certain shareholders have even asked Raveendran to step aside from the day-to-day operations of BYJU’S. The only respite that the edtech giant seems to have got is the interest that it has received from Joffre Capital and Duolingo for buying its subsidiary EPIC! Creations. As per reports, BYJU’S is banking on the sale of EPIC! to payback a part of its Term Loan B and get over the current financial crunch.
The post BYJU’S Financial Crisis: Employee PF Credit Stopped Again Even After Deduction From Salaries appeared first on Inc42 Media.
