Byju’s Issues Partial Salary Payments to Employees

The Indian Edtech company Byju's has recently faced difficulties paying its staff members' salaries because of financial limitations resulting from a legal dispute with some of its investors.

While 25% of workers in the lowest pay range have reportedly received their full salary, other workers have only gotten half payments, according to sources within the organization.

Byju's Explains Salary Delay Due to Investor Cash Restrictions

The management of Byju gave workers comfort by saying, "We processed your salary for February late at night on Friday." However, we anticipate that the wages will appear in your accounts on Monday because it was a second Saturday and because of the long weekend.

We appreciate your patience and really apologize for any trouble this delay may have caused you.

The temporary lack of resources for company operations has been linked to a group of investors restricting cash, which has resulted in financial difficulties for Byju's.

Byju's Management Faces Investor Allegations of Mismanagement

The National Company Law Tribunal (NCLT), Bengaluru Bench received a complaint alleging mismanagement and oppression against Byju's management, which is where the legal issue originated.

Sources claim that the complaint calls for the formation of a new board and the dismissal of the founders, including CEO Byju Raveendran.

In addition, it seeks to nullify the previously resolved rights dispute.

Among the petitioners are notable investors such as Prosus, General Atlantic, Sofina, and Peak XV, in addition to other stockholders like Tiger and Owl Ventures.

In response to the ongoing challenges surrounding Byju's USD 200 million rights offering, the National Company Law Tribunal (NCLT), Bengaluru Bench, has intervened, urging the company to consider extending the deadline for the offering.

Despite potential technological obstacles hindering the resolution of the issue,

NCLT Mandates Segregation of Byju's Funds Amid Legal Proceedings

 Byju's management has reportedly expressed reluctance to comply with such a request.

Consequently, an interim injunction from the NCLT has mandated Byju's to segregate the funds raised through the rights issue into a separate escrow account until the legal proceedings are concluded.

The NCLT has scheduled the next hearing for April 4, signaling the gravity of the situation and the urgency with which the matter needs to be addressed.

This development underscores the complexities and legal ramifications surrounding Byju's financial operations, highlighting the need for swift and prudent decision-making to navigate through these challenges effectively.