Byju’s unable to pay salaries as funds locked: Founder Raveendran

Mar2,2024



Mumbai: Byju Raveendran, founder and CEO of troubled edtech startup Byju's, has hit out at a group. investorsExplaining that their move to disable the company from using it treasury raised through rights issue has hindered the distribution of Salary For employees. “…I am sad to inform you that we will still be unable to process your salaries…..Unfortunately, a select few (4 out of our 150+ investors) have stooped to heartless levels, that's for sure Given that we are unable to utilize the funds raised to pay your hard-earned money,'' Raveendran said in a letter to employees on Saturday, reviewed by TOI. ''On his orders, the amount raised through the rights issue is currently locked in a separate account,'' Raveendran said, adding that the company is facing a crisis despite the successful completion of the $200 million rights issue . Byju's said it is trying to ensure that salaries are paid by March 10.
The firm's four investors – Prosus, Peak There are allegations. The company is being investigated by the Enforcement Directorate (ED) and the Ministry of Corporate Affairs (MCA). Although the court allowed Byju's to proceed with the rights issue, it passed an interim order directing the startup to keep the funds received as part of the rights issue in a separate escrow account. The court also said that the funds should not be withdrawn until the harassment and mismanagement suit filed by investors against the company management is settled.
“It is a sad reality that some of these investors have already made substantial profits – in fact, one of them has made eight times more than his initial investment in Byju’s. And yet, their actions show grave disregard for our lives and livelihoods,” Raveendran told the employees.
The cash-strapped company was betting on the rights issue to raise capital and meet its existing liabilities. Byju will now have to call an EGM (Extraordinary General Meeting) to seek shareholder approval and increase the authorized capital. “Countless hours have been spent exploring every possible avenue, involving our legal teams and advocating for your rights. However, despite our best efforts, we are left with no option but to face the heartbreaking reality that we are temporarily unable to provide you with the financial support you deserve,” Raveendran said.
Byju's is locked in a bitter battle with its investors, most of whom also voted to remove Raveendran as CEO and reconstitute the firm's family-run board.



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