The National Company Law Tribunal (NCLT) has told Byju's to pay salaries, irrespective of the company having access to the funds raised through its rights issue. NCLT has warned Byju’s of an audit if employees aren’t paid.
While hearing a plea by employees seeking payment of salaries, the Bengaluru bench of NCLT on July 4 stated, "You are a company that is functioning. Surely you should be having revenues." The tribunal has warned to carry out an audit by the Institute of Chartered Accountants of India (ICAI) if it fails to pay the staff. The tribunal directed Byju's to file a response to the employees’ application and listed the plea for hearing in the coming week. While Byju's paid April and May salaries, it is yet to make February and March payments in full.
While on the other hand, the company blamed on not having access to the funds it raised through the rights issue in February pertaining to salary delays. It said that on the orders of NCLT the funds from the rights issue are tied up in an escrow account till the disposal of the case. Additionally, to recover the pending dues, at least seven vendors have also sued Byju's at NCLT.
Going forward with Second Rights Issue
Byju's investors, who are occupied in a legal battle over alleged non-payment of dues by the firm, told the tribunal that they had challenged the Karnataka High Court's July 2 order that set aside the NCLT order which restrained the startup from launching a second rights issue.
The plea for the same would be heard by a division bench of the high court on 5th of July. On the directions of the high court, the tribunal would rehear the plea for a stay of the second rights issue on July 9 and also on a contempt petition filed by the investors. The investors have raised allegations that Byju’s has violated a tribunal order by allotting shares and using the funds from the rights issue.
