Byju Raveendran, founder of the edtech company Byju’s, has been facing financial difficulties for some time. Once considered India’s most valuable startup, Byju’s is currently unable to pay salaries to its employees for several months. The company has yet to make full payments for February and March salaries, although April and May salaries have been paid.
The National Company Law Tribunal (NCLT) has now ordered Byju’s to pay salaries to its employees, regardless of whether the company has access to funds raised through its recent rights issue. The tribunal has warned that if the company fails to pay its staff, an audit by the Institute of Chartered Accountants of India (ICAI) will be conducted. These comments came during a hearing on July 3, where employees filed a plea seeking payment of their salaries. The Bengaluru bench of NCLT stated that as a functioning company, Byju’s should be generating revenue and therefore should be able to pay its employees. The tribunal also directed Byju’s to file a response to the employees’ application and scheduled a further hearing in the coming week.
The delay in salary payments is attributed to the company’s lack of access to funds raised through the rights issue in February 2024. These funds are currently tied up in an escrow account, as ordered by the NCLT, pending the resolution of the ongoing case. Further complicating the situation, Byju’s is facing lawsuits from around seven vendors who are also seeking to recover their dues at the NCLT.
