byju’s investors caveat sc: Byju’s investors file SC caveats on rights issue

Prosus, Sofina SA, Peak XV Partners Investments, and General Atlantic Singapore TL Pte Ltd have filed separate caveats in the SC on Monday.

The Bengaluru bench of the tribunal had also on February 27 asked cash-strapped Byju’s to keep the proceeds from the rights issue in an escrow account and to consider extending its last date to protect rights of investors. However, the NCLT is yet to decide on whether the rights issue could be stayed.

The NCLT order had come on the petitions filed by a group of investors, who cumulatively hold a third of Byju’s and are pushing to remove founder and CEO Byju Raveendran and his family over alleged mismanagement. These investors are seeking a stay on the rights issues and maintaining a status quo on encumbering and transferring of any assets of Byju’s and its subsidiary, besides a complete disclosure of information by the company.

The investors led by Dutch investment firm Prosus claimed that the edtech giant siphoned off $533 million in an obscure hedge fund in the US and also alleged that they were being forced to participate as their shareholding would be reduced if they did not participate in the rights issue that was scheduled to close on February 29.

However, the board of directors, including the founder, his wife and cofounder Divya Gokulnath, and his brother Riju Raveendran, said that the investors were creating a roadblock for the company.

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Byju’s founder Raveendran had last week expressed concern over the company’s current financial situation, stating that they are unable to pay salaries due to the dispute with investors. “Byju’s is unable to pay salaries as rights issue funds locked in separate account amid dispute with investors,” the founder had said in a note to his employees.On February 23, Byju’s investors in an extraordinary general meeting voted for the removal of founder Raveendran as the CEO and also a change of the board.

Raveendran and family members had refused to attend the EGM, terming it as ‘invalid.’ However, the decision on the removal will remain on hold till the Karnataka High Court heard the case on March 13.

Prosus, Sofina SA, Peak XV Partners Investments, and General Atlantic Singapore TL Pte Ltd have filed separate caveats in the SC on Monday.

The Bengaluru bench of the tribunal had also on February 27 asked cash-strapped Byju’s to keep the proceeds from the rights issue in an escrow account and to consider extending its last date to protect rights of investors. However, the NCLT is yet to decide on whether the rights issue could be stayed.

The NCLT order had come on the petitions filed by a group of investors, who cumulatively hold a third of Byju’s and are pushing to remove founder and CEO Byju Raveendran and his family over alleged mismanagement. These investors are seeking a stay on the rights issues and maintaining a status quo on encumbering and transferring of any assets of Byju’s and its subsidiary, besides a complete disclosure of information by the company.

The investors led by Dutch investment firm Prosus claimed that the edtech giant siphoned off $533 million in an obscure hedge fund in the US and also alleged that they were being forced to participate as their shareholding would be reduced if they did not participate in the rights issue that was scheduled to close on February 29.

However, the board of directors, including the founder, his wife and cofounder Divya Gokulnath, and his brother Riju Raveendran, said that the investors were creating a roadblock for the company.

Discover the stories of your interest

Byju’s founder Raveendran had last week expressed concern over the company’s current financial situation, stating that they are unable to pay salaries due to the dispute with investors. “Byju’s is unable to pay salaries as rights issue funds locked in separate account amid dispute with investors,” the founder had said in a note to his employees.On February 23, Byju’s investors in an extraordinary general meeting voted for the removal of founder Raveendran as the CEO and also a change of the board.

Raveendran and family members had refused to attend the EGM, terming it as ‘invalid.’ However, the decision on the removal will remain on hold till the Karnataka High Court heard the case on March 13.