Byju's Faces Salary Payment Crisis Amid Investor Rift and Funds Lockup

Byju Raveendran, the company's founder, announced on Saturday that the ed-tech startup won't be able to pay staff wages since the money that was recently collected through a rights issue isn't available because of a legal disagreement with some investors.

Byju's Resolves Rights Issue but Faces Salary Payment Hurdles

Raveendran said that the rights problem, which was initiated a month ago, has been effectively resolved in a letter to the workers.

This was meant to be a cordial exchange of letters. We do, after all, have enough money to pay off our debt and cover our immediate necessities. I hate to notify you, nonetheless, that we will still be unable to process your wages,"

In the correspondence, which PTI obtained, Raveendran stated that the business is still making every effort to guarantee that salaries are paid by March 10.

Raveendran said "We will make these payments as soon as we are legally able to."

Additionally, Raveendran stated that the organization encountered difficulties last month as a result of a shortage of finances and that "now we are experiencing a delay despite having funds."

We are unable to use the money obtained to pay your well-earned salary because a small number of people (4 out of our 150+ investors) have unfortunately descended to a callous level, Raveendran stated.

"They have the money raised through the rights issue locked in a different account at their request," 

Despite having made significant gains from their investment in Byju's, Raveendran charged these chosen investors of having a callous disdain for the lives and livelihoods of others.

Raveendran's Determination: Byju's Fights for Workers' Rights Amid Investor Dispute

The painful truth is that a few of these investors have already achieved significant returns; in fact, one of them has increased their investment in BYJU'S by an astounding eight times.

In the letter, he stated, "Yet, their acts show a callous disregard for our lives and livelihoods."

According to Raveendran, he has battled bravely and nonstop, "leaving no stone unturned," in an effort to uphold the company's duty to its workers.

We have devoted many hours to investigating every option, coordinating with our legal teams, and defending your rights. But in spite of everything we have tried, we have to face the heartbreaking truth that we are not yet able to give you the financial help you need," he stated.

The troubled edtech company was asked by a company law court earlier this week to think about extending the USD 200 million rights issue closing date.

The management had indicated that it would not approve the request, even though enraged investors had pointed out technicalities that prevented the issue from closing on Wednesday.

The cash received by the firm about the rights issue shall be retained in a separate escrow account and should not be withdrawn until the dispute is resolved, according to an interim decision issued by the National firm Law Tribunal (NCLT), Bengaluru Bench, on February 27.