The National Company Law Tribunal (NCLT) has directed the embattled edtech major Byju’s to pay salaries irrespective of having access to the funds raised through its rights issue and warned of an audit if employees were not paid.

The tribunal also warned Byju’s of an audit by the Institute of Chartered Accountants of India if it fails to pay its staff.

“You are a company that is functioning. Surely, you should be having revenues,” the Bengaluru Bench of NCLT told Byju’s.

The tribunal directed Byju’s to file a response to the employees’ application and listed the plea for hearing in the coming week. This comes when Byju’s is yet to make February and March payments in full, but has paid April and May salaries.

Byju’s argued that due to lack of access to the rights issue funds resulting to delay of salary. The funds from the rights issue are tied up in an escrow account till the disposal of the case.

Investors challenge

Byju’s is entangled in a battle with its investors at the NCLT over a $200 million fund raised through the rights issue. This comes after the company’s foreign lenders approached the tribunal seeking corporate insolvency proceedings against the firm.

During the hearing, the investors told the tribunal that had challenged the Karnataka High Court order which set aside the NCLT order that restrained the start-up from launching a second rights issue. The plea will be heard by a division bench of the high court on July 5.

Amid the dispute, Byju’s on Wednesday requested the tribunal for 48 hours to determine whether it should undertake not to pledge, sell, or transfer its assets. This case will now be heard on July 9.

The tribunal, on the directions of the high court, would on July 9 rehear the plea for a stay of the second rights issue and also a contempt petition filed by the investors.

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