The troubles of the ed-tech company Byju’s are not decreasing. The company, facing debt and financial problems, has now gotten a fresh setback from NCLT, which has banned its second rights issue and asked to maintain the status regarding shareholders.
Instruction To Maintain Status Quo
In its recent order of June 13, NCLT told Byju that it cannot change its existing shareholders and shareholding. This means that the company cannot proceed with its proposed rights issue. NCLT says the status quo must be maintained until the main petition is heard.
The Issue Was Opened Last Month
Byju had prepared a plan to raise money through a rights issue to reduce its financial problems. This rights issue opened on May 13 and remained open till June 13. The NCLT order has come on the last day of the rights issue. Byju also raised money through rights issues earlier. This was its second rights issue.
Will Not Be Able To Use The Money
However, after the NCLT order, Byju’s second rights issue stopped. Whatever funds the company has raised in this issue before the order, it will not be able to use it for any work. Byju must keep the money raised from the second rights issue in a separate bank account.
Bank Account Details Will Have To Be Given
Apart from this, Byju will also have to submit the details of the escrow bank account. NCLT has asked the company to submit the details of the escrow bank account in which the money for the first rights issue came. The company will have to provide bank details from the opening of the first rights issue till the date of the order. Byju’s first rights issue opened on January 29. NCLT has given Byju 10 days from June 12, i.e. till June 22, to provide the details.
The Company Fell From The Heights To The Ground
Byju’s had once become the brightest star of the Indian startup world. After a valuation of $22 billion in the 2022 funding round, Byju’s also became India’s most valuable startup company. However, the situation is now such that the company struggles to pay its employees salaries.
