During its July 4 hearing, the tribunal told the troubled startup to pay employees irrespective of getting an access to funds raised via its rights issue
The tribunal also warned the company of an audit by the Institute of Chartered Accountants of India if it fails to pay its staff
The company is yet to pay the complete dues of its employees for the months of February and March
The Bengaluru bench of the National Company Law Tribunal (NCLT) has told embattled edtech startup BYJU’S
to pay salaries to its employees, irrespective of it having access to the funds raised via its rights issue or not.
“You are a company that is functioning. Surely you should be having revenues,” the bench said, according to a Moneycontrol report.
The tribunal also warned the company of an audit by the Institute of Chartered Accountants of India if it fails to pay its staff.
It is pertinent to note that the ICAI is already conducting an investigation into the affairs of the fallen edtech giant.
While it is yet to file a detailed report, ICAI’s president Ranjeet Kumar Agarwal said that the investigation led to the discovery of “gross negligence on accounting practices by individual auditors”.
The Tribunal was scheduled to hear a total of nine petitions filed in the matter today, two of which were filed by BYJU’s chief people officer Pravin Prakash, along with 25 other company personnel, against MIH Edtech Investments B.V. and 16 other investors of the company. Sources told Inc42 that the petitions were just a bid by the edtech company to appeal to the court to access the funds raised during its infamous rights issue.
The company is yet to pay the complete dues of its employees for the months of February and March. Post March, the company claims to be on track with employee payments. Despite this, clearing employee dues has been a headache for the company.
Facing fires from all ends, the company has also shed a substantial amount of its workforce in recent times. In April, it fired another 500 employees as part of its “ongoing restructuring exercise”. This exercise has seen thousands of people lose their jobs. It is pertinent to note that the company is yet to clear the dues of a significant amount of its employees as of now.
The case of the missing FnFs also got the attention of Karnataka Labour Minister Santosh Lad, who asked the company to settle the issue at the earliest just yesterday. During a meeting with the representatives of BYJU’S parent entity Think and Learn Pvt Ltd, the minister directed the company to settle at least 50% of the dues owed to former employees as soon as possible.
In response, the company explained that it was not being able to clear employee dues as they were in an escrow account under the direction of the tribunal. NCLT has barred BYJU’S from using the proceeds from the “second rights issue” and asked it to park the funds raised from the first rights issue in a separate account till the settlement of the case.
Yesterday, the Karnataka High Court (HC) set aside the interim order restraining embattled BYJU’S from undertaking a second rights issue and sent the matter back to the tribunal for a fresh consideration. NCLT is set to reconsider the ordeal tomorrow, according to Bar and Bench.
