Adversitement
Byju's Faces Salary Payment Delay Amidst Funding Dispute
Published On : 2024-03-09T15:42:18+0530 [ IST ] |
Author : Mayur_Tembhare
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Byju's, the prominent edtech company, is grappling with a delay in disbursing salaries to its extensive workforce comprising over 20,000 employees for the month of February. The company's ability to pay salaries has been impeded by complications arising from a funding dispute and legal directives.
The Bengaluru bench of the National Company Law Tribunal (NCLT) instructed Byju's to hold the proceeds from its rights issue, totaling approximately $250-$300 million, in a segregated account until the resolution of the case involving investors. As a result, Byju's finds itself unable to access these funds to fulfill its salary obligations.
Sources reveal that Byju's is currently unable to process salary payments due to the prevailing status quo and the closure of banks over the weekend. Although the company has refrained from providing immediate comments on the matter, it faces challenges in meeting the March 10 deadline for salary disbursement.
Byju Raveendran, the founder and CEO of Byju's, conveyed to employees earlier in the month his commitment to ensuring timely salary payments. However, Raveendran expressed regret over the company's inability to fulfill this commitment despite the successful closure of the rights issue. He attributed the delay to certain investors' actions, which have obstructed the utilization of raised funds for salary disbursement.
In a letter addressed to the staff, Raveendran lamented that a select group of investors had acted in a manner detrimental to the company's ability to honor its employees' hard-earned salaries. He clarified that despite the funding dispute, no funds have been diverted and approximately $533 million remain secured in a 100% non-US subsidiary of Byju's.
The ongoing funding dispute and subsequent delay in salary payments underscore the challenges faced by Byju's amidst its growth trajectory in the competitive edtech sector. As the company navigates these hurdles, it remains committed to resolving the issue and ensuring the financial well-being of its workforce.
Source : DNA
Tags : Byju's , funding dispute , edtech , NCLT , investors , salary payment , Employees , rights issue , subsidiary , capital , Byju Raveendran ,
Summary : Byju's, the embattled edtech company, is facing challenges in paying salaries to its over 20,000 employees for the month of February. The delay is attributed to funds raised through a rights issue being held in a separate account as directed by the National Company Law Tribunal (NCLT). Despite successfully closing the rights issue, Byju's CEO Byju Raveendran expressed regret over the inability to process salaries due to ongoing legal constraints. Raveendran cited certain investors' actions hindering the utilization of raised funds for salary payments, while clarifying that funds have not been misappropriated.
Adversitement