The National Company Law Tribunal (NCLT) has ordered Byju’s to pay employee salaries regardless of its access to funds raised through its rights issue, warning of an audit if payments are not made. During a hearing on July 4, the Bengaluru bench of NCLT stated, “You are a company that is functioning. Surely you should be having revenues,” in response to employees seeking their unpaid salaries. The tribunal cautioned that if the company failed to pay staff, it would initiate an audit by the Institute of Chartered Accountants of India (ICAI).
Byju’s has been instructed to respond to the employees’ application and the plea is set for another hearing next week. While the company has disbursed salaries for April and May, payments for February and March remain incomplete.
Byju’s has attributed the salary delays to its inability to access funds from a February rights issue, which are held in escrow per NCLT orders. Additionally, seven vendors have sued Byju’s at NCLT to recover their dues.
Investors have challenged the Karnataka High Court’s July 2 order that overturned NCLT’s restriction on launching a second rights issue. This plea will be heard by a division bench of the high court on July 5. NCLT, following high court directions, will rehear the stay plea for the second rights issue and a contempt petition filed by the investors on July 9. Investors allege that Byju’s violated tribunal orders by allocating shares and using funds from the rights issue.
