Byju’s, the edtech major, has faced a delay in processing its employees’ salaries for February. The delay is 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 amount of funds raised is approximately $250-$300 million.
Raveendran, the founder and CEO of 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.
It has been reported that a small group of investors, comprising just four individuals out of the 150+ investors, have played a role in preventing the utilization of the raised funds for employee salaries. The company described their actions as “rather brutal,” and the funds are currently 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 their efforts, the company finds itself in a difficult position of temporarily being unable to provide financial support to employees. Raveendran assured the staff that they are working diligently to resolve the situation. Byju’s aims to disburse salaries by 10th March once they obtain the necessary permissions in accordance with the law.
