The National Company Law Tribunal has stayed the second rights issue of Byju’s brand parent Think & Learn. Byju’s has been asked to provide full details of its shareholders before and after the allotment of shares under the first tranche of the rights issue on March 2.
The National Company Law Tribunal (NCLT) has stayed the rights issue of edtech firm and Byju’s brand parent Think & Learn, which began on May 11, effectively halting the process of maintaining status quo. The NCLT has directed to maintain the status quo.
In its June 12 order to Byju’s, the Bengaluru bench of the NCLT has asked it to submit full details of its shareholders before and after the allotment of equity on March 2 as per the first tranche of the rights issue.
According to the investors who complained to the tribunal, Byju’s had proposed a second rights issue through a letter dated May 11, which opened on May 13 and was to close on June 13.
“The company is directed to keep the funds collected so far in respect of this offer since the opening of the second rights issue in a separate account and the funds cannot be used till the hearing of the main petition in the case is completed,” the tribunal said in its order.
A group of four investors
– Prosus, General Atlantic, Sofina and Peak XV – with the support of other shareholders, including Tiger and Owl Ventures, had approached the NCLT against the company management and the rights issue.
Byju’s financial condition has deteriorated due to these reasons
- Ravindranath had mortgaged his house along with the houses of his family members to pay salaries to the employees in December 2023.
- The Board of Control for Cricket in India had also initiated bankruptcy proceedings against Byju’s. The company is accused of defaulting on payments worth Rs 158 crore.
- The Enforcement Directorate has also sent a notice for FEMA violation of more than Rs 9,000 crore.
- The condition of the company is so bad that due to non-payment of rent of Gurugram office, the property owner threw out the employees. Their laptops were confiscated.
