Due to financial constraints, Byju’s, the edtech startup had been delaying the payment of salaries. It has processed the February salaries for all its employees, partially, and has assured that the remaining dues will be cleared the moment the funds from the rights issue become available.
Full salaries have been paid to about 25 per cent of the employees who are part of the lower-salary categories. The rest of the 75 per cent have been paid partially.
The delay in the processing of salaries for February had happened due to the funds raised through the rights issue (special stock sale) being kept in a separate account as per the request of some important investors. The total amounts to approximately $250-$300 million.
In the first week of March, Raveendran, founder and CEO, Byju’s, had expressed regret in a letter to over 20,000 employees, citing challenges in processing salaries in February due to shortage of funds and the challenges continuing into March even though the funds existed.
A small group of investors —four out of the 150+ investors—had prevented the use of the raised funds to pay employees’salaries. The company had described the actions of these investors as being rather brutal, and had shared that the funds were locked in a separate account as directed by investors.
The partial processing of February salaries has clearly made use of available capital beyond the rights issue.
The Bengaluru bench of the National Company Law Tribunal (NCLT) had instructed Byju’s to keep the proceeds from the rights issue in a separate account until the resolution of the case with investors.
