SUMMARY
In an email sent to employees, BYJU’S CEO Byju Raveendran said that the rights issue has been closed and blamed investors for the delay in salary payments
Raveendran said the startup is trying to ensure that the salaries of the employees are credited by March 10
The Bengaluru bench of the NCLT has directed BYJU’S to keep the proceeds from its rights issue in a separate escrow account
Troubled edtech major BYJU’S has successfully closed its $200 Mn rights issue, at a valuation cut of 99%. However, the startup has yet again delayed salary payments to the employees.
In an email sent to employees, BYJU’S founder and CEO Byju Raveendran said that despite having the funds to pay the salaries for the month of February the startup is not able to credit them because of the actions of some of the investors.
Inc42 has accessed the email sent by the CEO to employees.
“Unfortunately, a select few (4 out of our 150+ investors) have stooped to a heartless level, ensuring that we are unable to utilise the funds raised to pay your hard-earned salaries. At their behest, the amount raised through the rights issue is currently locked in a separate account,” Raveendran said.
It is pertinent to note that the Bengaluru bench of the National Company Law Tribunal (NCLT), earlier this week, directed the company to keep the proceeds from its rights issue in a separate escrow account and consider extending the rights issue.
The Tribunal’s order came in response to a petition filed by a group of four investors of BYJU’S, including Prosus, Peak XV Partners, General Atlantic and Sofina, against the edtech giant and other promoters.
Training the guns on the investors, Raveendran said their actions convey a callous disregard for “our lives and livelihoods”.
“It is an agonising 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,” the email said.
The founder told the employees that their salaries will be credited by March 10. “We are striving to ensure that your salaries are paid by the 10th of March. We shall make these payments the moment we are permitted to do so as per law,” he added.
This is not the first time that BYJU’S has delayed salary payments to its employees. The edtech giant has been facing a funding crunch for almost a year now amid mounting losses, delay in filing financial statements, legal troubles, among others.
Most recently, it delayed its employees’ salaries for the month of November 2023 by four days due to an “unexpected technical glitch”.
Amid these troubles, BYJU’S also laid off thousands of employees in the past couple of years. Many of these laid-off employees also faced delays in getting their full and final dues.
The latest development comes at a time when BYJU’S and its promoters are at war with investors, which has resulted in both sides moving to different courts. Some of BYJU’S investors held an extraordinary general meeting (EGM) last week and passed seven resolutions, including those calling for reconstitution of the board and the ouster of Raveendran and his family members – wife Divya Gokulnath and brother Riju Raveendran – from their management roles at the startup.
However, Byju Raveendran got a temporary relief from the Bengaluru High Court a day before the EGM. The HC, in an interim order, said that any decisions taken by shareholders at the EGM will not come into effect till the next hearing in the case on March 13.
(With inputs from Bismah Mailk)
