As a result of the Supreme Court’s interim stay of the NCLAT’s ruling, the Edtech company Think and Learn, which owns the Byju brand, has not been able to pay its employees’ salaries for July. This was disclosed by a senior official on Tuesday.
The National Company Law Appellate Tribunal (NCLAT) dismissed Byju’s bankruptcy proceedings on August 2 and accepted the Rs 158.9 crore dues settlement with BCCI. On the basis of a plea by US-based creditor Glas Trust Company LLC, the Supreme Court on August 14 suspended the decision of the bankruptcy appellate tribunal, which had set aside the insolvency proceedings against the ed-tech firm.
Byju Raveendran, the founder and CEO of Think and Learn, stated in an email to staff members that while the company’s long path to recovery has been made more difficult by legal obstacles, the company is about to reverse the bad economic cycle that started two years ago.
“I would like to speak with you about something that is extremely important to both of us. Your July 2024 salary has not yet been credited. Due to a disagreement with the BCCI, our company recently encountered a significant issue that forced us into bankruptcy. After the NCLAT found in our favour, we were close to settling the dispute and getting our money back.
“The apex court has issued a temporary stay on the NCLAT’s decision, which means the control of the company’s accounts has not yet been restored to us,” Raveendran stated.
According to him, certain foreign lenders have filed an appeal with the highest court of appeals against the corporation and the NCLAT verdict.
“The founders can no longer provide additional funds to cover salaries as we have for the past many months. I promise that your salaries will be paid on time when we take back control, even if it means taking on further personal debt. This is a commitment, not just a promise. Investors are prepared to support our turnaround tale, according to Raveendran.
According to allegations made by foreign lenders, Byju’s has breached the terms of the agreement by using the funds it acquired from them in the US.
The assertion was refuted by Byju’s, which stated that the money obtained through the US Term Loan B (TLB) was not utilised for the Board of Control for Cricket in India (BCCI) settlement.
“My brother Riju has assumed full financial accountability for the Rs 158 crore BCCI settlement. All of the money that was needed to fulfil this commitment came from his assets, which he acquired between May 2015 and January 2022 by selling his Byju’s shares. The applicable income taxes have been paid in accordance with the law, and these sales have been fully documented,” stated Raveendran.
He declared that all legal requirements had been fully met in the completion of the BCCI settlement.
“We have presented it to the court under oath. It is quite evident from the document that of the Rs 3,600 crore he received from the sale of secondary shares, about Rs 2,600 crore were put back into Byju’s to support the business, and Rs 1,050 crore were paid in income taxes, according to Raveendran.
He said that for the previous 29 months, the founders of Think and Learn were its only source of funding.
“The company’s founders have collectively invested almost Rs 7,500 crore for a range of operating requirements. In actuality, Riju himself contributed Rs 1,600 crore of the Rs 3,976 crore that was paid to the squad in salary during the previous two years.
“When was the last time you saw founders using their savings, even borrowings, to pay salaries for their beloved team members for more than two years?” stated Raveendran.
Additionally, Raveendran stated in the email that the Enforcement Directorate’s investigation into Byju’s is limited to FEMA procedural violations, such as failing to file annual performance reports (APRs) on time for properly compliant foreign investments resulting from the postponed statutory audit.
“ED has not commenced any investigation against Riju or me in any personal capacity either,” he stated.
The claim that the founders of Byju are “fugitives” was denied by Raveendran, who stated that he has visited India ten times since March 2023 and has spent 77 days there altogether, whilst Riju was in the country just two weeks ago to pledge his final personal asset.
He claimed that 150 million students use Byju’s products and services each month, making it the largest ed-tech platform in the world.
“Over the past two years, this organic user base has increased, notwithstanding the recent obstacles faced. In fact, Byju’s is switching to a long-term business plan that employs thousands of people and provides services to millions of students in India,” he stated.