BENGALURU: Edtech company Byju's has delayed February salaries for over 20,000 employees, blaming four investors who had approached the National Company Law Tribunal (NCLT) against it.
Since the NCLT directed the firm to keep funds received from the rights issue in a separate escrow account, the company said it would not be able to use the funds to pay salaries.
Byju's said the company is ensuring that salaries are paid by March 10. For the past two to three months, the firm is struggling to pay salaries, and last month employees were informed that through a $200 million rights issue, the company would raise money and make payments.
In a letter to employees, founder and CEO Byju Raveendran said the rights issue has been successfully closed and this was supposed to be a happy correspondence.
"After all, we now have funds to meet our short-term needs and clear our liabilities. However, I regret to inform you that we will still be unable to process your salaries. Last month, we faced challenges due to a lack of capital, and now we are experiencing a delay despite having funds," he said.
He also added that four out of over 150 investors have "stooped to a heartless level, ensuring that we are unable to utilize the funds raised to pay your hard-earned salaries."
"It is an agonizing reality that some of these investors have already reaped substantial profits – in fact, one of them has made a staggering eight times their initial investment in Byju’s. And yet, their actions convey a callous disregard for our lives and livelihoods," he said.
Recently, the NCLT heard the petition filed by four investors -- Peak XV Partners, General Atlantic, Prosus and Sofina -- seeking an urgent order to stay the rights issue.
The NCLT observed that the Byju's board cannot increase authorised share capital on its own and it directed that they cannot complete the rights issue until they call for an EGM (extraordinary general meeting) to increase authorised capital and take shareholder approval.
Byju's had given an undertaking to the court that they will not use the proceeds of the rights issue until the authorisation has been secured.
