NCLT refuses to stay Byju's EGM over $200-million rights issue

NCLT refuses to stay Byju’s EGM over $200-million rights issue

Byju’s crisis: The National Company Law Tribunal (NCLT), Bengaluru, refused to grant a stay on Byju’s extraordinary general meeting (EGM) on March 29. The EGM was scheduled to increase the edtech company’s share capital with regards to the $200 million rights issue.

Byju’s’ investors, led by Prosus, moved NCLT for a stay on the planned EGM and to block the rights issue.

The tribunal refused to put a stay and the next hearing is scheduled for April 4.

Additionally, the tribunal directed Byju’s to share all relevant information sought by investors linked with the company’s financials, including the rights issue.

Prosus, General Atlantic, Peak XV Partners and Sofina, four of Byju’s’ investors had asked the tribunal for a stay on the rights issue.

The NCLT had earlier told Byju’s to keep the funds raised in a separate escrow account and not withdraw them until the matter was settled.

Byju’s, once one of India’s hottest startups, suffered a range of setbacks since 2023, including its auditor resigning, lenders beginning bankruptcy proceedings against a holding company, and a US lawsuit disputing the terms and repayment of a loan. This year, its investors voted to oust CEO Byju Raveendran on governance, financial mismanagement and compliance issues. In 2022, Byju’s was valued at $22 billion.

(With agency inputs)

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