MUMBAI: The National Company Law Tribunal (NCLT) on Thursday refused to stay the extraordinary common assembly (EGM) known as by Byju’s on March 29 to enhance the authorised share capital required to allow its $200 million rights issue, granting some reprieve to the troubled edtech startup.
Byju’s legal professionals argued in courtroom that the “only objective of the petitioners is to be restrictive”.The firm would want over 50% of votes to increase the authorised share capital. Four of Byju’s buyers who’ve been trying to block the rights issue because the outset had approached the NCLT, looking for a stay on the EGM.
Byju’s, which is reeling beneath a money crunch and has delayed the total disbursement of salaries for Feb for some staff, has been banking on its rights issue to increase capital and meet liabilities. Although the corporate can go forward with the EGM, it can’t but use the funds raised via the rights issue due to a court-approved stay on their utilization. Last month, the NCLT in an interim order had directed Byju’s to maintain the funds in a separate escrow account whereas additionally restraining the agency from withdrawing them till the matter is resolved.
Sources stated that after the rights issue is handed with a majority of the taking part votes, the issue closes formally and the courtroom is predicted to launch the escrow. The startup’s buyers Prosus, Peak XV Partners, General Atlantic and Sofina had opposed the rights issue. They had said of their submissions to the NCLT that there are severe allegations of siphoning off of funds by Byju’s promoters and the corporate is being investigated by the Ministry of Corporate Affairs and the ED.
Byju’s counsels stated that the EGM discover has been despatched to all shareholders together with the opposing buyers.
Byju’s legal professionals argued in courtroom that the “only objective of the petitioners is to be restrictive”.The firm would want over 50% of votes to increase the authorised share capital. Four of Byju’s buyers who’ve been trying to block the rights issue because the outset had approached the NCLT, looking for a stay on the EGM.
Byju’s, which is reeling beneath a money crunch and has delayed the total disbursement of salaries for Feb for some staff, has been banking on its rights issue to increase capital and meet liabilities. Although the corporate can go forward with the EGM, it can’t but use the funds raised via the rights issue due to a court-approved stay on their utilization. Last month, the NCLT in an interim order had directed Byju’s to maintain the funds in a separate escrow account whereas additionally restraining the agency from withdrawing them till the matter is resolved.
Sources stated that after the rights issue is handed with a majority of the taking part votes, the issue closes formally and the courtroom is predicted to launch the escrow. The startup’s buyers Prosus, Peak XV Partners, General Atlantic and Sofina had opposed the rights issue. They had said of their submissions to the NCLT that there are severe allegations of siphoning off of funds by Byju’s promoters and the corporate is being investigated by the Ministry of Corporate Affairs and the ED.
Byju’s counsels stated that the EGM discover has been despatched to all shareholders together with the opposing buyers.
