Byju Raveendran claims July salaries will be paid despite insolvency concerns

Byju Raveendran, Founder of the cash-strapped edtech firm BYJU’S, in an email, told employees that their July salaries would be paid once he regains control of the company amid growing concerns of insolvency.

“Your salary for July 2024 has not been credited yet...The apex court has issued a temporary stay on the NCLAT’s decision, which means the control of the company’s accounts has not yet been restored to us,” Raveendran said in the email as seen by YourStory.

“I guarantee this: When we regain control, your salaries will be paid promptly, even if that means raising more personal debt,” he added.

The financially struggling company has repeatedly delayed employee salaries in recent months. While it claims to have paid all employees their April and May salaries, the company has yet to fully settle payments for February and March.

“Out of the INR 3,976 crores disbursed as salaries to the team over the past two years, INR 1600 crores was infused by Riju (Ravindran) personally,” Raveendran noted in the email.

BYJU’S, which dodged a potential “death” after the NCLAT approved a Rs 158 crore settlement between the edtech firm and the BCCI on August 2, is once again facing insolvency concerns following an interim order by the Supreme Court of India on August 14, staying the appellate tribunal’s decision.

The apex court’s decision has effectively revived the insolvency proceedings against BYJU’S, overturning the NCLAT's earlier ruling that had set them aside.

The top court’s order followed an appeal by the US-based Glas Trust Company LLC, representing some of BYJU'S creditors, challenging the NCLAT’s approval of the settlement.

Riju Ravindran, Byju Raveendran’s brother and a major shareholder in the edtech company, made the payment to the BCCI to settle the dues.

Chief Justice DY Chandrachud, who headed the three-judge bench, directed that the amount paid by BYJU'S to the BCCI be held in a separate escrow account pending further review.

Meanwhile, the Supreme Court on Tuesday rejected BYJU’S plea to block the interim resolution professional (IRP) from forming a committee of creditors (CoC) till the apex court decides on the case. The top court, however, agreed to hear the case on August 22.

The duties of the IRP include managing the company’s affairs, overseeing its operations and assets, compiling a list of creditors, and forming a CoC.

On August 1, an advocate representing the IRP noted that they have received Form C from the lenders for $1.3 billion in dues, along with claims from 3,000 employees.

Amidst the ongoing turmoil, BYJU’S employees are anxiously watching the developments, hoping their careers won’t suffer further damage given the uncertainty surrounding the edtech company.