The investors alleged that BYJU’S violated the NCLT’s order by allotting shares to those who subscribed to its rights issue without increasing the company’s authorised capital
The company rejected the allegations and has been asked by the NCLT to file its response within 10 days
The troubled edtech major has also filed an application for initiating arbitration proceedings in the dispute between the parties
Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
Adding another chapter to the clash between BYJU’S and some of its investors, the disgruntled investors alleged in the National Company Law Tribunal (NCLT) that the embattled edtech giant violated the Tribunal’s order by allotting shares to those who subscribed to its rights issue without increasing the company’s authorised capital
During the NCLT hearing over the matter on April 4, the investors filed an affidavit placing their apprehension of the same on record, Bar and Bench reported.
The NCLT’s Bengaluru bench said it would be a “blatant violation” of its interim order dated February 27 if the company had done so. The next hearing in the case is scheduled on April 23.
On February 27, the NCLT passed an interim order directing BYJU’S board to increase the company’s authorised share capital for receiving the $200 Mn it planned to raise via a rights issue. Further, the company was directed to keep the proceeds from the rights issue in an escrow account till the Tribunal gives a final order on the investors’ plea.
In their affidavit, the investors claimed that the company announced the outcome of the extraordinary general meeting (EGM), held on March 29, where it was seeking to increase its authorised share capital, before the slated conclusion of the postal ballots. The results of the EGM are expected to come on April 6.
It is pertinent to note that the group of disgruntled investors – Prosus, General Atlantic, Sofina and Peak XV – moved the NCLT against the rights issue, which valued BYJU’S at 99% lower valuation, citing oppression and mismanagement. The investors also didn’t participate in the rights issue.
Further, they also approached the Tribunal in a bid to stay the EGM. However, the NCLT refused to stay the EGM.
Meanwhile, sources at BYJU’S rejected the latest allegations of the investors, calling them baseless. They said there was no violation of the NCLT’s interim orders and BYJU’S would be filing necessary affidavits and detailed responses to counter these allegations.
The Tribunal has given BYJU’S a 10-day time period to respond to the allegations.
Meanwhile, the troubled edtech major has also filed an application for initiating arbitration proceedings in the dispute between the parties.
According to the Bar and Bench report, the group of investors claimed that the application would not have any impact on their petition and urged the NCLT to decide on their plea seeking change at the company’s board.
It is pertinent to note that last month founder Byju Raveendran told BYJU’S shareholders that the board was considering making an offer for its disgruntled investors to participate in its rights issue.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.