The company law court in Bengaluru has extended the injunction on Byju’s use of funds from its rights issue, adjourning the matter until June 6 following hearings involving investors and management.
Earlier this year, the National Company Law Tribunal (NCLT) Bengaluru Bench directed Byju’s to keep the funds from its rights issue in a separate escrow account until the matter is resolved.
Investors have accused Byju’s of misusing funds and failing to comply with court orders. Byju’s, however, insists it has fully adhered to the NCLT’s directives. The next hearing is scheduled for June 6.
Four investors, including Prosus, General Atlantic, Sofina, and Peak XV, have alleged that Byju’s violated tribunal orders by using some of the raised funds. Byju’s denies these claims.
Byju’s legal counsel assured the NCLT that the company has fully complied with the court’s order issued on February 27.
The investor group, supported by shareholders like Tiger and Owl Ventures, has approached the NCLT against Byju’s management regarding the rights issue.
Byju’s concluded its USD 200 million rights issue in February at a significantly reduced valuation compared to its peak enterprise value of USD 22 billion.
Despite its earlier success, Byju’s has encountered financial strain due to students returning to physical classes post-pandemic and challenges following the acquisition of Aakash. Additional setbacks include auditor resignations, lenders initiating bankruptcy proceedings, and a US lawsuit disputing loan terms and repayment.