On June 3, the Chennai bench of the National Company Law Appellate Tribunal, NCLT, dismissed a plea that was filed by four investors against edtech firm Byju’s, as per a report by Moneycontrol.
The investors filed an appeal against the National Company Law Tribunal's (NCLT) April 23 ruling, which declined to issue an immediate, effective injunction against Byju's for allegedly disobeying orders.
The NCLAT observed that because investors have already filed a contempt petition against Byju's for violations, an order for the same. Therefore, the NCLAT was not inclined to intervene in the case.
Lawyers Manmeet Singh and Sairam Subramanian, senior partners and partners at law firm Saraf and Partners, represented the embattled edtech firm. The law firm Trilegal represented the investors.
Advertisement
On April 23, four investors of Byju's Peak XV Partners—General Atlantic, Chan-Zuckerberg Initiative, and Prosus—accused the edtech firm of using some of the funds. In violation of the NCLT order, the fund was raised during the recently concluded right issue. However, Byju’s has denied the charge.
The “oppression and mismanagement plea” filed by the four investors was deferred by NCLT’s Bengaluru Bench till June 6. The investors claimed during the hearing that Byju's had not placed the funds it had received from the rights offering into the escrow account before February 27.
Advertisement
Byju's also disregarded the tribunal's directive to preserve the status quo regarding shareholding and instead awarded shares to individuals who took part in the rights issue. All the claims have been denied by the edtech platform.
On February 27, Byju’s was directed by the NCLT to keep the funds it received in an escrow account. The edtech firm was asked to keep the funds in the escrow account until the oppression and mismanagement plea that was filed by the investors was disposed of. This comes at a time when the edtech firm is in acute financial stress and has often been unable to pay its employees.
Just one email a week