The Karnataka High Court has set aside the National Company Law Tribunal (NCLT) order that restrained embattled edtech company Byju’s from launching a second rights issue.
Investors — Peak XV Partners, General Atlantic, and Prosus — had filed a plea in the NCLT to halt Byjus’ second rights issue, as it would further dilute their holding in the company.
Justice SR Krishna Kumar said he was sending the case back to the NCLT for fresh consideration. The detailed copy of the order is awaited.
On June 12, the Bengaluru bench of NCLT directed Byju’s to maintain status quo on existing shareholders and their holding.
“Status quo with regard to existing shareholders and their shareholding shall be maintained till the disposal of the main petition,” the order that was made available on June 13 said.
The order restrained Byju’s from using the proceeds of the second rights issue, which, according to the investors, commenced on May 13 and was to end on June 13. The same is to be deposited in a separate account until the disposal of the main petition.
The move was challenged in the two writ petitions filed by Think & Learn (parent company of Byju’s) as well as its Managing Director Byju Raveendran and executive directors Riju Raveendran and Divya Gokulnath.
Usually, NCLT orders are challenged before the National Company Law Appellate Tribunal (NCLAT); however, Byju’s filed a writ in the high court.
The order was passed with regard to an ‘oppression and mismanagement’ application filed by the investors of the company such as Peak XV Partners, General Atlantic, and Prosus.
The case is now expected to come up for hearing on July 4.