Byju’s CEO Takes Personal Loan to Ensure Staff Salaries Amid Financial Challenges and NCLT Dispute
Byju's founder, Byju Raveendran, recently took proactive measures to ensure employee salaries amidst financial hurdles and a dispute with investors, according to a report by Business Standard. Facing challenges, Raveendran secured a private debt of around ₹30 crore to cover the March salaries of Byju's approximately 15,000 employees. While senior staff received partial payments, teachers and lower-ranking employees were fully compensated for March.
The delay in salary disbursements stemmed from funds raised through a recent rights issue, which became entangled in a dispute with investors. Funds from this issue were held in a separate account due to the ongoing disagreement. Despite this, Byju's initiated payments for March salaries after a two-month delay, thanks to alternative credit arrangements.
In correspondence with employees, Byju's clarified its inability to access the rights issue funds pending approval and reiterated its commitment to ensuring timely salary payments, irrespective of the legal outcome. The National Company Law Tribunal (NCLT) hearing, scheduled for the following day, presented an opportunity for Byju's to request the release of the blocked funds.
The NCLT dispute arose from investors, including Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA, contesting Byju's decision to raise $200 million at a post-money valuation of $225 million. The tribunal directed Byju's to retain the funds until resolution, leading to salary delays and arbitration proceedings with key investors.
Recent legal developments, including a directive to negotiate a settlement with an operational creditor and an extended relief granted to Raveendran by the Karnataka High Court to continue leading Byju's amidst internal conflicts, underscore the complex landscape the edtech company navigates.
While challenges persist, Byju's remains committed to addressing financial strains, resolving disputes, and maintaining operational stability amid its growth trajectory.
