Byju’s, the prominent educational technology company headquartered in Bengaluru, is facing a critical challenge concerning its payroll obligations. With a workforce of over 20,000 employees eagerly anticipating their February salaries, the company is on the brink of missing the March 10 deadline due to complications arising from its recent rights issue.
The National Company Law Tribunal (NCLT) in Bengaluru had directed Byju’s to segregate the proceeds from its rights issue, which amounted to approximately $250-$300 million. This directive was issued pending the resolution of ongoing legal disputes with investors. However, despite these instructions, the funds from the rights issue remain inaccessible, leaving Byju’s unable to fulfill its salary commitments to its employees.
Sources familiar with the situation reveal that Byju’s is facing challenges due to the ongoing status quo, which has been further complicated by bank closures over the weekend. Despite the company’s efforts to navigate these obstacles, it has yet to provide a clear resolution to the payroll predicament.
Byju Raveendran, the founder and CEO of the company, had previously assured employees of timely salary disbursements, stating that efforts were underway to ensure payment by March 10. However, a recent communication to the staff revealed that financial hurdles persist, despite the successful closure of the rights issue.
In a candid letter addressed to the workforce, Raveendran expressed regret over the company’s inability to process salaries on time, attributing the delay to external pressures. He expressed frustration at the actions of certain investors, accusing them of hindering the utilization of the raised funds for payroll purposes.
Amid growing concerns, Byju’s sought to reassure stakeholders that funds have not been misappropriated. The company emphasized the existence of $533 million in a secure non-US subsidiary. However, the immediate resolution of the financial predicament remains uncertain, leaving employees uncertain about their salary status as they await further updates.
