Byju’s was unable to pay salaries to employees as the funds raised through a recent rights issue have been locked in a “separate account” due to the ongoing dispute with the investors, founder Byju Raveendran said on March 2, Moneycontrol reported.
“Unfortunately, a select few (4 out of our 150+ investors) have stooped to a heartless level, ensuring that we are unable to utilize the funds raised to pay your hard-earned salaries. At their behest, the amount raised through the rights issue is currently locked in a separate account,” said Raveendran, in a letter to Byju’s employees.
As per the letter that Moneycontrol has seen a copy of, Raveendran added that the company will now make efforts to ensure that employee salaries are paid by the 10th of March.
“It is an agonizing reality that some of these investors have already reaped substantial profits – in fact, one of them has made a staggering eight times their initial investment in BYJU’S. And yet, their actions convey a callous disregard for our lives and livelihoods,” he said.
This comes as the National Company Law Tribunal (NCLT) in its order passed on February 27 directed the edtech company to keep funds received from the rights issue in an escrow account till the disposal of the oppression and mismanagement plea filed by four of the company’s investors.
The company has laid off 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, Moneycontrol reported. Citing differences with Raveendran, Byju’s investor board members have left too. To ease its troubles, Byju’s early investor Ranjan Pai has ploughed in the capital and the company set up an advisory council with veterans such as Mohandas Pai and Rajnish Kumar and elevated Arjun Mohan as CEO. Moneycontrol reported, it is also in talks to divest assets such as Great Learning and Epic.
Read More: Byju’s hits back at investors; writes a letter to employees