BYJU’S delays payment of salaries again
Bengaluru-based edtech company BYJU'S noted that it is “following a parallel line of credit” to ensure that employees receive their salaries by April 8.
Edtech firm has once again delayed the payment of salaries for its employees, this time for the month of March, amidst a severe liquidity crunch.
“We regret to inform you that there will again be a delay in the disbursement of salaries. A few misguided foreign investors in BYJU’S have obtained an interim order in late February which has restricted usage of the funds raised through the successful rights issue,” BYJU’S told its employees in an email seen by YourStory.
“This irresponsible action by the 4 foreign investors has compelled us to temporarily hold the disbursal of salaries until the restriction is lifted,” the email added.
The Bengaluru-based company noted that it is “following a parallel line of credit” to ensure that the employees receive their salaries by April 8.
BYJU’S, and a group of prominent investors in the edtech company, including Prosus, General Atlantic, Chan Zuckerberg Initiative, and Peak XV, have found themselves in disagreement. The investors have sought to void the $200 million rights issue initiated in January by appealing to the National Company Law Tribunal (NCLT).
In an order dated February 27, the NCLT directed that the funds received by BYJU’S for the rights issue be placed in a separate escrow account, with instructions not to withdraw them until the disposal of the oppression and mismanagement suit filed by a group of four investors against the management of the company.
On Friday, BYJU’S Founder and CEO Byju Raveendran notified investors that the edtech firm garnered over 50% votes to increase the authorised share capital for the $200 million rights issue. It also invited some of its “valued existing shareholders” to join the rights issue to safeguard their ownership stake from dilution.
In the email to its employees, BYJU’S reiterated that it has the necessary vote to increase the authorised capital for the rights issue. “It means that once the restrictions on using the raised funds are lifted, we can meet all our salary commitments immediately,” the email added.
In March, the edtech company had delayed February salaries and partially paid them later that month. It still needs to process outstanding payments for the remaining salaries.
Edited by Megha Reddy