In an internal memo, he blamed a select few investors, and added that the amount raised through the rights issue is locked in a separate account.
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“We now have funds to meet our short-term needs and clear our liabilities. However, I regret to inform you that we will still be unable to process your salaries. Last month we faced challenges due to lack of capital, and now we are experiencing a delay despite having funds,” Raveendran wrote in his note to employees.
In an order dated February 27, the National Company Law Tribunal (NCLT) asked Byju’s to keep the funds from the rights issue in a separate escrow account and not to use the proceeds unless authorised. The tribunal’s verdict was in a case filed by some of the edtech firm’s investors, who are opposing Byju’s $200 million rights issue.
Four key Byju’s investors, led by Dutch investment firm Prosus, told the NCLT that the company was allowed to issue capital of Rs 6 crore through the rights issue, but it was instead issuing Rs 40 crore, as mentioned in the offer letter. This violated the Companies Act, they said.
Raveendran added on Saturday, “Unfortunately, a select few (four 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. It is an agonising reality that some of these investors have reaped substantial profits”.
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ET had reported on February 21 that Byju’s $200 million rights issue has been fully subscribed, its founder informed shareholders, in a desperate relief to the financially beleaguered edtech startup. The rights issue happened at a 99% discount to Byju’s previous peak valuation of $22 billion.The communication was just ahead of an extraordinary general meeting called by a group of investors to seek removal of Byju Raveendran as the chief executive and change in the board.
On February 23, a group of investors in Byju’s parent Think & Learn also voted to remove founder Byju Raveendran as CEO and revamp the board, which includes his wife and cofounder Divya Gokulnath and brother Riju Ravindran.
On February 24, Raveendran wrote a letter to employees, saying he continues to be the company’s CEO.