Edtech Giant Byju's Initiates Employee Salary Payout After 2 Months Delay Amidst Dispute; Details Here

Edtech giant Byju's has finally commenced salary payments for March after facing a two-month delay. The company, known for its educational technology solutions, announced that the salary payout process is expected to be completed by April 18. This move comes after the firm encountered challenges in accessing funds due to an ongoing dispute with its investors.

According to reports from the Economic Times, Byju's informed its employees via email about the commencement of salary disbursements. The email revealed that an alternative line of credit has been arranged to ensure timely payments. The company expressed gratitude for the patience and understanding exhibited by its staff during this period of uncertainty.

However, despite the recent developments, Byju's is still grappling with hurdles concerning access to the funds from a rights issue. The National Company Law Tribunal (NCLT) has intervened in response to a plea filed by investors, including Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA. These investors contested Byju's decision to raise $200 million at a post-money valuation of $225 million.

The NCLT has instructed Byju's to retain the funds from the rights issue in an escrow account until the dispute is resolved, exacerbating the delay in salary payments. The company has sought arbitration to address the ongoing conflict with its key investors. Byju's has been given a 10-day window to submit its response to the tribunal, with the next hearing scheduled for April 23.

Adding to the company's woes, recent arbitration rulings have further constrained its financial operations. An arbitrator recently prohibited Byju's from selling shares of a subsidiary after it breached the terms of loans totalling $42 million.

Byju's, once valued at $22 billion, has witnessed a precipitous decline in its valuation amid regulatory scrutiny and investor allegations. Denying any wrongdoing, the company now finds itself valued at approximately $250 million, marking a 99% drop from its peak valuation.

Moreover, discrepancies have emerged regarding Byju's authorized share capital and the face value of the rights issue, posing legal complications under the Companies Act. In response, Byju's has called for an Extraordinary General Meeting (EGM) to address the matter and consider increasing the authorized share capital of the company.