Welcome to the Byju’s Financial Audit Saga

Amidst the swirling controversies of financial mismanagement, the National Company Law Tribunal recently made a significant statement to Byju’s. The tribunal stated that they have the option to conduct a financial audit to evaluate the company’s financial standing and determine if there is a lack of funds to pay employee salaries.

Employees of Byju’s had filed a plea seeking their unpaid dues, triggering this response from the court. The tribunal emphasized that despite the challenges, Byju’s remains an operational entity and must be generating revenue to meet its salary obligations.

As discussions unfolded in the courtroom, Byju’s was urged to either substantiate its financial constraints or brace itself for a comprehensive audit. At this stage, no final decision has been reached on this matter, and Byju’s has chosen to remain silent regarding these developments.

Several employees at Byju’s have yet to receive their full salaries for the months of February and March. In a letter addressed to the employees, the company’s founder and CEO, Byju Raveendran, cited investor actions as the reason behind the delayed salary disbursements.

Furthermore, in April, Byju’s implemented a strategic downsizing, letting go of around 500 employees and relinquishing most of its office spaces. In a preliminary ruling in late February, the NCLT directed Byju’s to segregate the funds raised through its $200 million rights issue into a separate escrow account. This move was accompanied by restrictions on fund withdrawals until the resolution of a suit filed by investors against the company’s management for alleged mismanagement and oppression.

Investors such as Prosus, Peak XV Partners, Sofina, and General Atlantic have consistently opposed Byju’s rights issue and have challenged legal decisions related to the matter. The Karnataka High Court recently overturned the NCLT’s stay on Byju’s second rights issue, further escalating tensions within the company.

As the Byju’s financial audit saga continues to unfold, the future of the edtech giant hangs in the balance. Stay tuned for more updates on this evolving story.