NEW DELHI: In a setback to edtech firm Byju’s, the Bengaluru bench of the National Company Law Tribunal (NCLT) has restrained the company from going ahead with the ongoing second rights issue, and has asked it to park the funds collected so far in a separate account till the disposal of the main petition.
The subscription for the second rights issue began on May 13 and was scheduled to conclude on June 13, 2024.
“In the present facts and circumstances of the matter, this tribunal restrains the respondents (Byju’s) from going ahead with the rights issue, which is in progress, till the disposal of the main CP No. 18/BB/2024.”
“The respondents are directed to keep the amounts collected so far since opening of the second rights issue in relation to this offer in a separate account which should not be utilised till disposal of the main petition,” the NCLT bench comprising Justices S S Sundaram and Manoj Kumar Dubey said.
The main petition against the $200 million rights issue was filed by investors of Byju’s requesting the NCLT to put a hold on the issue as an interim relief and requested for status-quo order on altering the shareholding of the edtech firm.
The investors had submitted before the NCLT that there are serious allegations of siphoning off funds by the promoters of Byju’s and probe have been initiated by the ED and Ministry of Corporate Affairs (MCA) against the company.
The first issue was launched in January-February. The company failed to achieve the target of $200 million via issue, and therefore initiated a second rights issue to enable additional pro-rata subscriptions to attain its capital-raising target.