NCLT tells Byju's to pay salaries or face an audit

Byju’s co-founder Byju Raveendran.

The National Company Law Tribunal (NCLT) has told Byju's to pay salaries irrespective of the edtech company having access to the funds raised through its rights issue and warned of an audit if employees were not paid.

"You are a company that is functioning. Surely you should be having revenues," the Bengaluru bench of NCLT said on July 4 while hearing a plea by employees seeking payment of salaries.

The tribunal warned of an audit by the Institute of Chartered Accountants of India (ICAI) if the company failed to pay the staff.

The tribunal directed Byju's to file a response to the employees’ application and listed the plea for hearing in the coming week.

While Byju's paid April and May salaries, it is yet to make February and March payments in full.

The company has blamed not having access to the funds it raised through the rights issue in February for salary delays. The funds from the rights issue are tied up in an escrow account on the orders of NCLT till the disposal of the case. At least seven vendors have also sued Byju's at NCLT to recover their dues.

Investors challenge go-ahead to second rights issue

During the hearing, Byju's the investors, who are locked in a legal battle over alleged non-payment of dues by the firm, told the tribunal they had challenged the Karnataka High Court's July 2 order that set aside the NCLT order that restrained the startup from launching a second rights issue.

The plea would be heard by a division bench of the high court on July 5.

The tribunal, on the directions of  the high court, would on July 9 rehear the plea for a stay of the second rights issue and also a contempt petition filed by the investors.

The investors have alleged that Byju’s violated a tribunal order by allotting shares and using the funds from the rights issue.