Byju’s, the embattled ed tech company, has approached the Karnataka High Court to challenge a National Company Law Tribunal (NCLT) order that prevents it from proceeding with its second rights issue. Typically, NCLT orders are appealed at the National Company Law Appellate Tribunal (NCLAT), but Byju’s has opted for a writ petition in the Karnataka High Court, often used to contest governmental actions violating fundamental rights.
The High Court’s website shows the plea was briefly heard on June 18 and 21, with no effective order issued on those dates. On June 12, the NCLT in Bengaluru instructed Byju’s to maintain the status quo regarding existing shareholders and their shareholding.
The NCLT order bars Byju’s from proceeding with its second rights issue, which started on May 13 and was scheduled to end on June 13. Byju’s is also prohibited from using any funds collected so far from this issue; these funds must be deposited into a separate account.
Additionally, the tribunal instructed Byju’s to submit complete details of the escrow bank accounts related to the rights issue from January 29 onwards within 10 days from June 12. The company must also disclose comprehensive information about the allotments made on March 2 before the increase in authorized share capital.
This directive stemmed from an application filed by investors such as Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative, and Prosus, who sought to halt Byju’s second rights issue to prevent further dilution of their holdings in the company.
