“The National Company Law Tribunal (NCLT) on March 28 refused to defer an extraordinary general meeting called by the board of directors of embattled edtech company Byju’s to raise the authorized capital for the rights issue.
The tribunal has listed the case for hearing on April 4, where other related issues will also be addressed. The EGM scheduled for March 29 will include a vote on increasing Byju’s authorized share capital to facilitate the rights issue aimed at raising funds to address its significant liquidity crisis.
On February 27, the NCLT directed Byju’s to hold funds received from the rights issue in an escrow account until the disposal of the oppression and mismanagement plea filed by four investors. Additionally, the tribunal directed Byju’s to consider extending the closure date of the rights issue to safeguard the petitioners’ rights regarding applications for shares under their entitlement.
The NCLT reserved the plea to halt the rights issue for orders, and an order is pending.
During the NCLT proceedings, investors argued that Byju’s call for a rights issue was illegal and should be stayed, while Byju’s board, including founder Byju Raveendran, his wife and co-founder Divya Gokulnath, and his brother Riju Raveendran, countered that the investors were obstructing the company’s operations.
Following the NCLT’s decision, the investors filed pleas in the Supreme Court, requesting a hearing before the court makes any decision regarding a potential plea against the NCLT’s order. MIH Edtech Investments BV, Peak XV Partners Investments, Sofina SA, and General Atlantic Singapore TL Pte Ltd filed separate caveats in the apex court on March 4.”
