India's Byju's can't access rights issue funds to pay staff
02/03/2024 15:40
By Hritam Mukherjee and Dhwani Pandya
March 2 (Reuters) - Indian edtech startup Byju's is
unable to pay staff because it can't access recently raised
funds due to a legal dispute with some of its investors, founder
and CEO Byju Raveendran said in an email to employees on
Saturday seen by Reuters.
"I regret to inform you that we will still be unable to
process your salaries. Last month we faced challenges due to a
lack of capital and now we are experiencing a delay despite
having funds," Raveendran said, adding he aimed to pay February
salaries, which were due on March 1, by March 10.
Byju's did not immediately respond to a Reuters email
seeking comment.
Raveendran's email blamed four of Byju's' more than 150
investors for blocking access to funds raised through a rights
issue that was completed on Feb. 28.
The company, whose services range from online tutorials to
offline coaching, has not said how much the issue raised. It
said in January it planned to raise $200 million to clear its
"immediate liabilities" and for other operational costs.
Four of its investors - Prosus, General Atlantic, Peak XV
Partners and Sofina - asked India's company law tribunal for a
stay on the rights issue, according to court documents seen by
Reuters.
In response, the National Company Law Tribunal of India told
Byju's to keep the funds raised in a separate escrow account and
not withdraw them until the matter was settled.
Byju's has suffered setbacks since early 2023, including its
auditor resigning, lenders beginning bankruptcy proceedings
against a Byju's holding company, and a U.S. lawsuit disputing
the terms and repayment of a loan. The company was once one of
India's hottest startups and valued at $22 billion in 2022.
Last month, investors including Prosus and Peak XV, voted to
oust Byju Raveendran on governance, financial mismanagement and
compliance issues. Byju's has called that move invalid.
(Reporting by Dhwani Pandya
Additional reporting by Arpan chaturvedi
Editing by Mark Potter)
((dhwani.p@thomsonreuters.com;))