Byju’s CEO Raveendran says unable to pay salaries, lambasts investors for blocking funds

Byju’s CEO Raveendran says unable to pay salaries, lambasts investors for blocking funds

Byju’s founder and CEO Byju Raveendran on Saturday lashed out at investors saying that the company has been unable to pay salaries to employees as the funds have been locked in a separate account “at the behest” of investors.

On February 27, the National Company Law Tribunal (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 four of the company’s investors. Think & Learn Pvt Ltd, the parent company of Byju’s, had last month raised $ 200 million (around Rs 1,660 crore) through a rights issue of shares to the existing investors. It was hoping to salvage the operations through the funds raised through the rights issue.

“Unfortunately, a select few (4 out of our 150 plus investors) have stooped to a heartless level, ensuring that we are unable to utilize the funds raised to pay your hard-earned salaries,” Raveendran said in a letter to the employees. “At their behest, the amount raised through the rights issue is currently locked in a separate account,” he said.

“It is an agonizing reality that some of these investors have already reaped substantial profits – in fact, one of them has made a staggering eight times their initial investment in Byju’s. And yet, their actions convey a callous disregard for our lives and livelihoods,” he said.

“Despite our best efforts, we are left with no option but to confront the heart-wrenching reality that we are temporarily unable to provide you with the financial support you deserve,” Byju’s CEO said. “We are striving to ensure that your salaries are paid by the 10th of March. We shall make these payments the moment we are permitted to do so as per law.”

On February 23, investors said they “unanimously passed all resolutions”, including the reconstitution of the board of directors and ouster of founder and CEO Byju Raveendran and family members, put forward for vote at the Extraordinary General Meeting of Think & Learn Pvt Ltd.

These resolutions included a request for the resolution of the outstanding governance, financial mismanagement and compliance issues at Byju’s, the reconstitution of the board of directors so that it is no longer controlled by the founders of Think & Learn and a change in the leadership of the company, said statement from Prosus, a leading global technology investor. While allowing the EGM to be held, Karnataka High Court had recently granted interim relief to Byju’s, stating that any decisions made during the meeting would not be given effect until the next hearing.

Raveendran said the rights issue, which was launched a month ago, has been successfully closed. “After all, we now have funds to meet our short-term needs and clear our liabilities. However, I regret to inform you that we will still be unable to process your salaries. Last month, we faced challenges due to a lack of capital, and now we are experiencing a delay despite having funds,” he told the employees.

“Countless hours have been spent exploring every possible avenue, engaging our legal teams, and advocating for your rights. We are actively pursuing every available means to rectify this situation at the earliest and restore stability to our lives,” he said.

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