India: NCLT instructs beleaguered edtech firm BYJU’s to clear salaries of staff

India: NCLT instructs beleaguered edtech firm BYJU’s to clear salaries of staff

FILE PHOTO: People walk past an advertising hoarding of Byju's, an Education Technology company and one of India's biggest startup, outside one of its branch in New Delhi, India, June 23, 2023. REUTERS/Adnan Abidi/File Photo

The National Company Law Tribunal (NCLT), a quasi-judicial body that adjudicates issues relating to Indian companies, has told beleaguered edtech firm BYJU’s to pay salaries to its employees and warned of an audit if otherwise.

“You are a company that is functioning. Surely you should be having revenues,” the tribunal said on July 4 while hearing a plea by as many as 62 employees seeking payment of salaries.

Once hailed as India’s most valuable startup, BYJU’s has been staring at a financial crisis for quite some time. It is yet to pay salaries for February and March to its employees while it has doled out those for April and May.

The company, however, has cited the reason for the delay to not having access to the funds it raised through the rights issue in February.

The funds from the rights issue are in an escrow account as per the orders of NCLT for the time being. Around seven vendors have already sued BYJU’s at NCLT to recover their dues.

Think & Learn Private Limited (TLPL), the parent company of BYJU’S, in January had announced plans to raise $200 million via a rights issue to all its equity shareholders.

It had issued a statement saying the rights issuance would be used to fund the ongoing capital expenditure and support general corporate purposes to achieve operational sustainability.

 

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