Byju's Staff Face July Salary Delay Due to Supreme Court Stay, Says CEO

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. This stay has prevented the company from accessing its accounts, according to a top official.

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On August 2, the National Company Law Appellate Tribunal (NCLAT) approved a Rs 158.9 crore settlement with BCCI and dismissed insolvency proceedings against Byjus. However, on August 14, the Supreme Court stayed this verdict following a plea from US-based creditor Glas Trust Company LLC.

Impact of Legal Challenges

Byju Raveendran, founder and CEO of Think and Learn, addressed employees in an email about the delay in salary payments. He explained that legal obstacles have prolonged the company's recovery but assured that they are close to reversing their negative business cycle.

"I want to address the matter of utmost concern to you - and to me as well. Your salary for July 2024 has not been credited yet. Our company recently faced a serious challenge that pushed us into insolvency due to a dispute with the BCCI. We settled the case and were on the brink of regaining control of our finances after the NCLAT ruled in our favour," Raveendran stated.

Financial Responsibility and Commitment

Raveendran mentioned that founders cannot infuse more capital for salaries as they have done previously. He promised that once control is regained, salaries will be paid promptly, even if it requires raising personal debt. "This isn't just a promise - it's a commitment," he said.

Foreign lenders have accused Byjus of misusing funds raised in the US, which Byjus denies. The company claims that funds from Term Loan B (TLB) were not used for settling dues with BCCI.

Founders' Financial Contributions

Raveendran highlighted his brother Riju's role in settling Rs 158 crore with BCCI using his finances from share sales between May 2015 and January 2022. These transactions were documented, and relevant taxes were paid.

"My brother, Riju, has taken full financial responsibility for settling Rs 158 crore with the BCCI. The funds used to discharge this obligation were sourced entirely from his finances, which were accumulated through the sale of his shares in Byjus between May 2015 and January 2022," Raveendran noted.

Capital Infusion by Founders

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. Of the Rs 3,976 crore disbursed as salaries over two years, Rs 1,600 crore was personally infused by Riju.

"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.

Enforcement Directorate Investigation

The Enforcement Directorate's investigation against Byjus is limited to procedural deficiencies under FEMA. These include delays in filing annual performance reports 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.

Refuting Allegations

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

"Byjus is still the largest ed-tech platform globally with 150 million students using our products and services every month," he said.

User Base Growth

Despite recent challenges, Byjus' organic user base has doubled over two years. The company is transitioning to a sustainable business model serving millions of students across India while employing thousands of people.

The company's journey continues amidst legal battles and financial hurdles. However, its commitment to employees and users remains steadfast as it navigates these challenges.