Byju's Staff Salary Delayed as Supreme Court Freezes Accounts

Think and Learn, the owner of Byjus, has not paid July salaries due to a temporary stay by the Supreme Court on the NCLAT's decision, a top official stated. The National Company Law Appellate Tribunal (NCLAT) had approved a Rs 158.9 crore settlement with BCCI on August 2, setting aside insolvency proceedings against Byjus. However, the Supreme Court stayed this verdict on August 14 following a plea from US-based creditor Glas Trust Company LLC.

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Byju Raveendran, founder and CEO of Think and Learn, informed employees via email that legal hurdles have delayed the company's recovery. He assured that they are close to reversing the negative business cycle that began two years ago. "Your salary for July 2024 has not been credited yet," he said, attributing this to a dispute with BCCI that led to insolvency issues. The company was on the verge of regaining financial control after the NCLAT ruling.

Legal Challenges and Financial Strain

The Supreme Court's temporary stay means Byjus still lacks control over its accounts, Raveendran explained. He mentioned that some foreign lenders have been litigating against the company and appealed the NCLAT ruling before the apex court. "Founders are unable to infuse more capital to pay salaries like we have always done over the past many months," he added.

Raveendran guaranteed that once control is regained, salaries will be paid promptly, even if it requires raising more personal debt. "This isn't just a promise - it's a commitment," he emphasised. He also noted that investors are ready to support their turnaround story.

Foreign Lenders' Allegations

Foreign lenders have accused Byjus of misusing funds raised in the US, which Byjus denies. They claim that money from Term Loan B (TLB) in the US was not used for settling dues with BCCI. Raveendran clarified that his brother Riju took full financial responsibility for settling Rs 158 crore with BCCI using his own finances from share sales between May 2015 and January 2022.

"The funds used to discharge this obligation were sourced entirely from his finances," Raveendran stated. He added that these sales were well-documented and income taxes were paid as required by law. The BCCI settlement was completed in full compliance with legal requirements and submitted under oath to the court.

Founders' Financial Contributions

Over the past 29 months, Think and Learn's only source of capital has been its founders. They have infused approximately Rs 7,500 crore into the company for various operational needs. Out of Rs 3,976 crore disbursed as salaries over two years, Rs 1,600 crore came from Riju personally.

"When was the last time you saw founders using their savings, even borrowings, to pay salaries for their beloved team members for more than two years?" Raveendran asked rhetorically.

Enforcement Directorate Investigation

The Enforcement Directorate's investigation into Byjus is limited to procedural deficiencies under FEMA, such as delays in filing annual performance reports (APRs) related to compliant overseas investments due to delayed statutory audits. "ED has not commenced any investigation against Riju or me in any personal capacity either," Raveendran clarified.

Raveendran also refuted allegations of Byjus founders being fugitives. He mentioned travelling to India ten times since March 2023 and spending 77 days there in total. Riju was in India two weeks ago to pledge his last personal asset.

Byjus' Global Presence

Despite recent challenges, Byjus remains the largest ed-tech platform globally with 150 million students using its products monthly. This user base has doubled over the last two years. "Byjus is transitioning to a sustainable business model that serves millions of students across India and employs thousands of people," Raveendran said.

The company continues to face significant legal and financial challenges but remains committed to overcoming them and ensuring employee welfare.