Byju’s key investors move NCLT against edtech firm’s rights issue
New Delhi: Byju’s key investors — Prosus, General Atlantic, Sofina and Peak XV — have moved the National Company Law Tribunal (NCLT) against the embattling edtech major over its rights issue, investor sources said on Friday. According to sources, the VC firms have cited “suppression of investor rights and mismanagement of the company”. The four investors filed the petition before the Bengaluru bench of the tribunal, according to sources. This is the first time Byju’s investors have legally moved against the rights issue. Byju’s did not immediately comment on the investors’ move.
The edtech company said earlier this week that the rights issue by its parent company Think & Learn Pvt. Ltd to raise $200 million at a 99 per cent valuation cut was fully subscribed. “Investors have sought relief on declaring the rights issue as void, and declaring the founders and the management as unfit to run the company,” according to investor sources. The investors said the company’s management has not shared “relevant financial information with the investor group”. The battle between Byju’s and investors intensified after the edtech major said the company’s co-founder and CEO Byju Raveendran and Board members will not attend the extraordinary general meeting (EGM) called by select investors to oust its CEO on Friday.
Byjus founder Byju Raveendran has allegedly pledged his house to pay employees salary after facing a severe cash crunch. Byju’s founder Byju Raveendran has reportedly pledged his under-construction villa and a few other houses of his family members worth Rs 100 crore to pay employee’s salaries. Embattling Edtech unicorn Byju’s parent company Think and Learn Private Limited will hold its 11th annual general meeting on December 20, as it faces myriad of issues amid severe cash crunch.
The meeting has been called to approve and adopt the audited financial statements of the company for their financial year ended March 2022, together with the report of the board of directors and auditors. The meeting will also consider and approve the appointment of MSKA & Associates as statutory auditors of the company. Meanwhile, Byju’s founder and CEO Byju Raveendran reportedly called an urgent meeting on Tuesday with senior management amid the delicate liquidity situation, as it struggles to pay salaries of its employees.
