Byju’s Employees to Receive February Salary by March 10: Founder Raveendran

The EdTech company, Byju, will have to see a way out till March 10th to pay the salaries of February. The company’s founder and CEO, Byju Raveendran, had given this information in a letter written to employees on Saturday.

According to news agency PTI, Byju Raveendran told employees, “4 of the lowest-ranking among our 150+ creditors have reached the lowest level. Due to this, we cannot pay your salaries. We had collected funds only to pay salaries through rights issue, but due to the legal disputes ongoing with the creditors, it is currently tied up in a separate account.

Efforts to Pay Salaries by March 10th: Byju Raveendran

“It’s a sad reality that some creditors have already filed for bankruptcy,” Raveendran said. From the initial creditors, 8 creditors have received more than the initial amount. We are unable to provide the financial assistance you are entitled to. We are trying to pay your salary by March 10th.

Raveendran said, “We can only pay salaries when we get exemptions according to the law. The company had to face protests last month due to the lack of funds, and now we are facing a delay due to lack of funds.

Creditors Demand ₹1,657 Crore Rights Issue

Byju’s creditors, Prosys, Envi, and others, are unhappy, picking only 99% in the peak. The value of the previous funding round was $22 billion, or about ₹1.82 lakh crore.

Byju’s creditors have criticized that the company had taken out an IPO of US$533 million or about ₹4,416 crore from an unclear hedge fund and had demanded ₹1,657 crore rights issue. It was counted as illegal and against the law.

Raveendran Sold His House to Pay His Salary

Byju’s founder Byju Raveendran has sold his house and the houses of his family members to pay employees’ salaries. He mortgaged two houses in Bengaluru for almost ₹100 crore and paid salaries to around 15,000 employees.

Byju’s Creditors Removed Raveendran from the Board

At the same time, on February 23, after an extraordinary general meeting (EGM) of Byju’s creditors, the company’s founder-CEO Byju Raveendran, his wife Divya Gokulanath, and his brother Riju Raveendran were removed from the board.

The creditors of Byju such as Envi, Prosys, and Peak XV, including some blue-chip creditors, voted in EGM to remove Raveendran and his family. About 60% of the shareholders who hold 30% or more shares in Byju had given proposals to make changes in leadership and management and to start forensic investigation against governance violations.

Raveendran Said – I Will Remain Byju’s CEO

After this, on February 24, Byju Raveendran wrote to employees in a letter, “I am writing this letter to you as the CEO of our company. Whatever is read in the media is false. I will remain the CEO of the company, and the management and board will remain the same.

Raveendran further stated that, ‘The claims made by the small group of creditors brought in by the major creditors that they have passed a resolution unanimously in EGM are completely false. Only 170 shareholders, which is about 45% of the shareholders, voted in favor of the resolution. This clearly shows the very limited support received through this uninvited meeting.

Byju Challenges Order of Karnataka High Court

He also challenged any decision taken during the meeting and said that any decision taken during the meeting will not be effective until the next hearing on March 13.

3 Major Issues with Byju in the Past

• The Board of Control for Cricket in India has started proceedings against Byju. There is an allegation of defaulting on a ₹158 crore payment against Byju.
• The ED has issued notices in cases of FEMA violations of more than ₹9,000 crore. FEMA was formed in 1999 to regulate foreign exchange flows.
• Employees of the Gurugram office were fired for not paying rent. Their laptops were confiscated.

Byju’s loss increased to ₹8,245 crore in 2022

Byju’s parent company Think and Learn has reported a loss of ₹8,245 crore in the financial year 2022. The loss in the financial year 2021 was ₹4,564 crore. This means that the company’s loss has almost doubled. The company’s total revenue during this period was ₹5,298 crore. Revenue was ₹2,428 crore in 2021. This means there has been a 118% increase in revenue.

Byju’s creditors have criticized that the company had taken out an IPO of US$533 million or about ₹4,416 crore from an unclear hedge fund and had demanded ₹1,657 crore rights issue. It was counted as illegal and against the law.