BYJU’S has requested NCLT for 48 hours to decide whether to agree to not pledge, sell, or transfer its assets amid an investor dispute
This comes a day after the Karnataka HC set aside the NCLT’s interim order, passed last month, which had restrained BYJU’S from undertaking a second rights issue
The story traces its origins to February 2024, when reports first surfaced indicating that the edtech major was considering a rights issue at a significantly reduced valuation of 99%
Embattled edtech startup BYJU’S has requested for 48 hours from the National Company Law Tribunal to decide whether it should undertake not to pledge, sell or transfer its assets amid a dispute with investors.
“I don’t know what my client (Byju’s) wants to do but I will obtain instructions from them on whether such an undertaking can be given,” BYJU’S senior counsel KG Raghavan told the tribunal, as reported by Moneycontrol.
The lawyer’s statement was in response to an application filed by the company’s US-based lenders who want the firm to be restrained from alienating its shares.
As per another report by NDTV, this plea stemmed from Glas Trust Company LLC, representing over 100 lenders to BYJU’s US entity, BYJU’S Alpha Inc., which is undergoing bankruptcy proceedings in Delaware. Glas Trust seeks to prevent BYJU’S from alienating its shares during this period.
BYJU’S
confirmed the development to Inc42. The case will be heard on July 9 after the NCLT is informed of BYJU’s decision on the undertaking.
This comes a day after the Karnataka High Court reportedly set aside the NCLT’s interim order, passed last month, restraining BYJU’S from undertaking a second rights issue. Hearing BYJU’S petition against the NCLT’s order, Karnataka HC’s Justice SR Krishna Kumar sent the matter back to the Tribunal for fresh consideration, Bar and Bench reported.
The development also comes at a time when BYJU’S is embroiled in multiple legal cases in courts across India and the US. Disgruntled investors have accused the company of violating the NCLT’s February order.
The story traces its origins to February 2024, when reports surfaced that the edtech major was looking to undertake a rights issue at a 99% valuation cut. Subsequently, investors organised an extraordinary general meeting (EGM) in a bid to remove CEO Byju Ravendran and his family from leadership at the company.
The edtech giant’s net loss widened by 81% to INR 8,245.2 Cr in FY22 from INR 4,564.3 Cr in FY21. Operating revenue rose over 120% year-on-year to INR 5,014.6 Cr during the year under review.
