Embattled edtech company Byju’s has not yet paid salaries for the month of January amid a worsening liquidity crisis, sources have told Moneycontrol.
The delay is despite Byju’s assuring its employees in December that their salaries would be credited on the first day of every month.
“To help you plan ahead, we have listed below the upcoming scheduled pay dates,” the email said, adding the company would disburse December salaries on January 2 and January salaries on February 1. Moneycontrol has reviewed a copy of the email.
Recently, the edtech firm announced it was trying to raise funds through a rights issue at a post-money valuation of $225 million. The valuation is 99 percent lower than the company's last funding round that valued the firm at $22 billion, sources said.
In a letter om January 2, Byju's senior management confirmed Moneycontrol's report of a "slight delay in salary disbursements this month because of the artificially induced crisis by these select investors."
The salary delay came hours after investors sought an extraordinary general meeting (EGM) to adopt resolutions on governance, financial mismanagement and compliance issues.
The investors also demanded the reconstitution of the Board of Directors so that it was is no longer controlled by the founders of Byju's parent company Think & Learn, and a change in leadership as well.
Reports have suggested that the company’s founder and CEO Byju Raveendran pledged his home as well as those owned by his family members to raise money to pay employees amid the cash crunch.
Byju's, once India's most-valued startup, has been under fire since the start of 2022 for a range of issues, including accounting irregularities, alleged mis-selling of courses and mass layoffs.
The company has fired thousands of employees in the last 12 months as it battled a double blow of drying venture capital funding and slowing demand for online learning services. Since then, its investor board members have left too, citing differences with Raveendran.
The company has tried to fix some of the problems. Its early investor Ranjan Pai ploughed in the capital, it set up an advisory council with veterans such as Mohandas Pai and Rajnish Kumar and elevated Arjun Mohan as CEO. It is also in talks to divest assets such as Great Learning and Epic.
A US unit of Byju's, Alpha, which had been in control of its lenders, has filed for Chapter 11 bankruptcy proceedings in a court in Delaware, listing liabilities in the range of $1 billion to $10 billion.
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