Byju’s, the embattled edtech company, is expected to disburse April salaries to its employees this week. In a recent development, Byju Raveendran, founder and CEO, procured a private debt of approximately Rs 30 crore to meet the March payroll obligations.
However, sources have revealed a delay in the disbursement of April salaries, citing the funds from a recent rights issue being held in a separate account due to an ongoing dispute with investors.
Legal conflicts with investors at the National Company Law Tribunal (NCLT) led to hearings being postponed until 6 June, impacting Byju’s financial capabilities. Originally, the company intended to utilise the funds from the rights issue to cover operational costs and employee salaries. However, the NCLT’s decision has impeded these plans, exacerbating Byju’s financial challenges.
In early March, Raveendran, founder and CEO, Byju’s, had expressed regret in an internal letter to over 20,000 employees, citing challenges in processing salaries due to capital shortages and the current delay despite available funds. A small group of investors, comprising four individuals out of the 150+ investors, had played a role in preventing the utilisation of the raised funds for employee salaries. As a result, the funds were locked in a separate account as directed by investors. 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.
With a workforce of around 15,000 employees, Byju’s faces a salary liability ranging between Rs 40 and 50 crore. To address the situation, the company has implemented a new compensation policy, tying sales staff salaries to weekly revenue generation.
This policy, effective from 24 April to 21 May, allocates half of the weekly revenue collection to sales associates, aiming to ensure timely compensation amidst financial constraints.
