Four investors of embattled edtech firm Byju’s have lodged requests in the Supreme Court, seeking a chance to present their arguments before any decision is made regarding a potential plea against a recent order from the National Company Law Tribunal (NCLT).
MIH Edtech Investments BV, Peak XV Partners Investments, Sofina SA, and General Atlantic Singapore TL Pte Ltd filed individual caveats in the apex court on March 4.
On February 28, the NCLT granted permission to Byju’s to proceed with its $200-million rights issue but mandated that the proceeds be placed in an escrow account. It also suggested extending the deadline to safeguard the rights of investors.
Typically, challenges to NCLT rulings are brought before the National Company Law Appellate Tribunal (NCLAT). However, these investors have taken an unprecedented step by approaching the Supreme Court directly. The court typically exercises discretion in entertaining petitions against NCLT decisions.
During proceedings at the NCLT, investors contended that Byju’s decision to announce a rights issue was unlawful and should be halted. Meanwhile, the company’s board, comprising founder Byju Raveendran, his wife and co-founder Divya Gokulnath, and his brother Riju Raveendran, argued that the investors were impeding the company’s operations.
In a significant development on February 23, Byju’s investors voted at an extraordinary general meeting (EGM) to remove founder Raveendran as CEO and change the board. However, this decision is pending until the Karnataka High Court hears the case on March 13.
While the NCLT deliberates on whether to suspend the rights issue, it issued its order after thorough hearings on February 27.
Raveendran expressed his inability to pay employee salaries due to the funds from the rights issue being held in a separate account amid the ongoing dispute with investors.
“Unfortunately, a select few (4 out of our 150+ investors) have stooped to a heartless level, ensuring that we are unable to utilize the funds raised to pay your hard-earned salaries. At their behest, the amount raised through the rights issue is currently locked in a separate account,” Raveendran stated in a letter to Byju’s employees.
