Byju’s, facing challenges from investors including General Atlantic, Prosus, and Peak XV, filed a plea with the National Company Law Tribunal (NCLT) seeking arbitration in their ongoing dispute.
Representing Byju’s, Dhyan Chinappa argued that an application under section 8 of the Arbitration and Conciliation Act should take precedence over the existing NCLT proceedings.
The dispute arose from allegations that Byju’s violated a previous NCLT order by distributing shares without increasing its authorized share capital, as directed by the tribunal. Byju’s has refuted these allegations.
The NCLT bench, composed of Justices K Biswal and Manoj Kumar Dubey, has given Byju’s 10 days to respond to the allegations, with the next hearing scheduled for April 23.
Previously, a group of investors, including Prosus NV, General Atlantic, Sofina, and Peak XV Partners, contested Byju’s $200-million rights issue, leading to legal proceedings. Despite their objections, the NCLT allowed the rights issue to proceed but mandated compliance with its directives regarding share capital augmentation.
Investors have also raised concerns about transparency in the process, alleging they were not provided adequate access to documents and notice of the EGM.
The NCLT emphasized the importance of adherence to its orders by all parties involved. Currently, Byju’s authorized share capital conflicts with the value of the rights issue, necessitating an EGM for capital adjustment.
