Byju's clears 97% dues after EPFO probe into delayed PF payments

Byju's, which has been in a tiff with its term loan B lenders for almost a year now, has been negotiating hard to strike a deal with them.

Byju’s has cleared nearly 97 percent of its provident fund (PF) dues after the Employees Provident Fund Organisation (EPFO) probed the company over delays in PF payments, two people with direct knowledge of the matter told Moneycontrol.

Byju’s, in a mail sent to the EPFO on June 27, said that the company has deposited PF dues for the period between August 2022 and May 2023 worth Rs 123.1 crore, the people said, requesting anonymity. The company told the EPFO that it will be remitting the balance Rs 3.43 crore within the next two days.

Moneycontrol has seen the text of the mail. With this, Byju’s has settled PF payments until May, the people further said. “June contributions will be due only by 15th July and the company has agreed to pay that duly,” said one of the people quoted above.

Queries sent to the EPFO did not elicit an immediate response.

“This is to confirm Byju’s has no pending PF dues.  The complete amount visible on the PF portal has been paid. Please note that if there is any amount that's not reflecting on the portal, the same is because of technical or authentication issues. This should not be construed as the company's pending dues,” said Zulfiquar Memon,  MZM Legal,  legal representative of Byju’s.

Byju’s move to settle most of its PF dues comes a couple of days after Moneycontrol reported that the company has delayed PF payment for the majority of its employees starting October last year.

Data officially sourced through EPFO suggested that the majority of employees were also yet to get PF payments for the months of April and May. However, the company had been deducting the PF from employees’ salaries every month.

Earlier this week, Raghunathan KE, EPFO Board member representing employers, said that the EPFO will make sure that all Byju’s employees get their provident fund (PF) dues (if pending).

“Byju's employees need not worry about their PF dues. Their social security custodian, the EPFO, will ensure they get their hard-earned money back,” Raghunathan told Moneycontrol in a telephonic conversation.

EPFO's probe against Byju's comes days after the company reportedly came under the scanner of the Ministry of Corporate Affairs (MCA).In April, Byju's also under the provisions of Foreign Exchange Management Act.">saw its offices getting searched by India's financial probe agency, the Enforcement Directorate (ED), under the provisions of Foreign Exchange Management Act.

Byju’s settling of statutory dues also comes nearly a week after the company lost three of its non-promoter directors--GV Ravishankar of Sequoia Capital India (now Peak XV Partners), Vivian Wu of Chan Zuckerberg Initiative and Russel Dreisenstock of Prosus. Byju’s auditor, Deloitte, one of the largest audit firms globally, also resigned citing a “long delay” by the company to file its FY22 (2021-22) financials. Byju’s filed its FY21 (2020-21) results after a delay of nearly 18 months, for which, Deloitte had given an adverse opinion.

Byju’s, founded over a decade ago by former teacher Byju Raveendran, has raised over $5 billion, most of it in the past five years. The company soared to new highs in March 2022 when it raised an $800 million funding round at a whopping $22 billion valuation, becoming the most-valued startup in the country. But since then, fortunes have turned for the company.

Byju’s has also seen its fair value getting marked down by marquee investors like Blackrock, the world’s biggest asset management company (AMC) and Prosus, Byju’s biggest shareholder. On June 27, Bloomberg reported that Byju's was looking to onboard new investors to prevent some existing investors from trying to reduce founder Byju Raveendran's control over the company.

To be sure, Byju’s has been looking to raise as much as $1 billion but the company has not been able to close the funding round. Byju’s has also been in a tiff with its term loan B lenders for over six months. Both, the lenders and the company, have sued each other in US courts.