Byju’s Is Charged With Breaking NCLT Orders; Case Postponed Until June 6

Four of the investors in the troubled edtech platform Byju’s have accused it of breaking the National Company Law Tribunal’s (NCLT) decision by utilizing part of the money it raised during the rights sale. The business, however, has refuted the accusations.

The NCLT has postponed the hearing on the “oppression and mismanagement plea” until June 6. The hearing was scheduled on April 23. Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative, and Prosus are among the investors who have accused the ed tech company of breaking the February 27 NCLT decision.

According to the investors, Byju’s has not yet placed the funds it obtained from the rights issue into the escrow account. “A financial agreement whereby an asset or money is held by a third party on behalf of two other parties that are in the process of completing a transaction” is what Investopedia defines as an escrow.

Investors claim that Byju’s has already distributed shares to persons engaged in the rights issue, notwithstanding the court’s injunction to preserve the current ownership structure. Byju’s has refuted each and every one of these accusations, stating that everything was carried out legally.

Byju’s was instructed to hold the proceeds of the rights issuance in an escrow account in the NCLT’s ruling dated February 27. To safeguard the interests of the investor, this was done. In addition, the court had requested that Byju’s refrain from allocating shares to participants in the rights offer without first raising the authorized capital of shares.

Byju’s problems are becoming worse. A portion of the company’s March compensation was disbursed to workers on April 20. The Economic Times said that the corporation only gave mid-senior staff 50% of their salaries. In a similar vein, the employer has also failed to pay the full wage for February. Byju Raveendran, the company’s founder and CEO, had to incur personal debt in order to cover the wages of his staff.