The processing of salaries for February at the Edtech major Byju’s has been delayed again. This time 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 an internal communication, Raveendran, founder and CEO, Byju’s, expressed regret in a letter to over 20,000 employees, citing challenges in processing salaries last month due to capital shortages and the current delay despite available funds.
The company highlighted that a small group of investors, comprising four individuals out of the 150+ investors, have played a role in preventing the utilisation of the raised funds for employee salaries. It described their actions as being rather brutal. It is reported that the funds are presently locked in a separate account as directed by investors.
The letter also highlighted that some of these investors have already gained substantial profits, with one individual reportedly making eight times their initial investment in Byju’s.
The Bengaluru bench of the National Company Law Tribunal (NCLT) has instructed Byju’s to keep the proceeds from the rights issue in a separate account until the resolution of the case with investors.
Despite the efforts, the company finds itself in the difficult position of temporarily being unable to provide financial support to employees.
However, Raveendran assured the staff that they are working diligently to resolve the situation. Byju’s aims to disburse salaries by the 10 March, once they obtain the necessary permissions in accordance with the law.
