The Bengaluru bench of the National Company Law Tribunal (NCLT) has referred the case of embattled edtech Byju’s rights issue to the president of the tribunal owing to a difference of opinion between the members of the Bengaluru bench.
The president of NCLT is now likely to allocate the case to a third member of the NCLT to hear the interim application again. The two-member NCLT benches usually have a judicial and a technical member. Since, the Bengaluru NCLT has just one bench and hence a third member from another bench of the tribunal is expected to be allocated the case.
This comes at a time when the company recently concluded its extraordinary general meeting (EGM) to increase the company’s authorised share capital, reported businessline. Byju Raveendran also wrote to the dissenting shareholders to participate in the right issue. However, none of the dissenting investors have participated in the rights issue, post the the 72-hour deadline.
The NCLT Bengaluru bench had earlier refused to stay the EGM but told the edtech firm that any resolution passed can’t be implemented before the next hearing scheduled on April 4.
In February, NCLT directed Byju’s to keep funds received from the rights issue in an escrow account till the disposal of the oppression and mismanagement plea filed by investors --Peak XV Partners, General Atlantic, Prosus.
The tribunal had then directed Byju’s to “consider the extension of the closure date of the right issue so that the rights of the petitioners about the making of applications for shares under their rights entitlement does not get prejudiced.”
On April 2, Byju’s had let go of nearly 500 employees largely across sales and marketing functions, at a time when it is struggling to raise capital for day-to-day operations, reported businessline.
Recently businessline reported that Byju’s had held back salaries for the second month in a row, awaiting a green signal from NCLT to use funds from the rights issue.
“We are writing to you today with a heavy heart but with a message of hope and reassurance. We regret to inform you that there will again be a delay in the disbursement of salaries,” the management said in an email to employees.