Byju’s, the troubled edtech giant based in Bengaluru, is grappling with a pressing payroll dilemma as it grapples to fulfill its financial commitments. With over 20,000 employees eagerly anticipating their February salaries, the company is on the verge of missing the March 10 deadline due to complications stemming from its recent rights issue.
As per the directive from the Bengaluru bench of the National Company Law Tribunal (NCLT), Byju’s was mandated to segregate the funds garnered from its rights issue, totaling around $250-$300 million, pending the resolution of ongoing legal disputes with investors. Despite this instruction, the funds remain inaccessible, thereby hindering the company’s ability to honor its salary obligations.
Sources with insight into the situation suggest that Byju’s is facing significant hurdles due to the ongoing status quo, worsened by the closure of banks during the weekend. Despite the company’s endeavors to tackle these obstacles, it has yet to offer clear clarification on the situation.
Byju Raveendran, the founder and CEO of the company, had previously reassured employees about timely salary disbursements, affirming, “We are committed to ensuring that your salaries are paid by March 10. Despite the company’s endeavors to tackle these obstacles, it has yet to offer clear clarification on the situation.
In a frank letter to the workforce, Raveendran conveyed his regret over the inability to process salaries, attributing the delay to external pressures. He expressed disappointment with certain investors, accusing them of impeding the use of raised funds for payroll purposes.
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In response to growing concerns, Byju’s took steps to reassure stakeholders that funds have not been misused, emphasizing the presence of $533 million in a secure non-US subsidiary. Nevertheless, the company’s capacity to address its immediate financial challenges remains uncertain, leaving employees in a state of uncertainty as they await additional updates.
