Byju Raveendran, founder of Byju’s, has informed employees that the edtech firm will be unable to process salary payments due to a legal dispute with certain investors, despite the successful closure of a recent rights issue. In a letter addressed to staff, Raveendran expressed regret over the situation and assured employees that efforts are underway to resolve the matter by March 10.
The letter highlighted the challenges faced by Byju’s, including a lack of capital and delays in accessing funds raised through the rights issue. Raveendran attributed the delay in salary payments to a group of investors who have allegedly prevented the utilization of the raised funds by locking them in a separate account.
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Despite the company’s efforts to advocate for employees’ rights and explore legal avenues, Raveendran lamented the temporary inability to provide financial support to staff. The next hearing on the matter is scheduled for April 4, as per the National Company Law Tribunal’s interim order.
The dispute with investors arose following allegations of financial irregularities, including the alleged transfer of funds to an obscure hedge fund in the US. This controversy adds to Byju’s recent challenges, including corporate governance issues and financial strains caused by the return of students to physical classes post-pandemic.
The once-celebrated edtech startup now faces a series of setbacks, including the acquisition of Aakash, auditor resignations, and legal disputes. Despite these challenges, Raveendran reassured employees of his commitment to resolving the situation and fulfilling the company’s obligations.
This development underscores the complexities and uncertainties faced by Byju’s amidst its rapid growth and evolving corporate landscape. As the company navigates through these challenges, its ability to maintain employee trust and stability remains critical for its future success.
