Long-overdue salaries: 62 ex-staffers plan to take Byju’s to NCLT
As many as 62 former employees of Byju’s have come together to serve a notice of filing an insolvency and bankruptcy case against the beleaguered edtech giant at the National Company Law Tribunal (NCLT) in Bengaluru, demanding payment of their long-overdue salaries.
“Canvas Legal, a Bengaluru-based law firm, has issued a demand notice of more than Rs 2.30 crore on behalf of 62 employees to Byju’s,” said Rajat Singh, a former Mathematics instructor at Byju’s Tuition Centre in Delhi and representative of the ex-employees.
The letter, sent on July 4, 2024, and seen by Business Standard, warns: “The undersigned request you to unconditionally repay the unpaid operational debt (in default) in full within 10 days from the receipt of this letter failing which we shall initiate corporate insolvency resolution process in respect of M/S Think & Learn Pvt Ltd (Byju’s parent).”
This is part of a broader action against Byju’s and involves over 1500 disgruntled former employees. Many are on the brink of approaching the NCLT in Bengaluru to claim their dues.
Karnataka Labour Minister Santosh Lad recently held a meeting with representatives of Think and Learn, asking them to settle the unpaid dues of former employees. Byju’s workforce now approximately has 13,000 members, down from nearly 15,000 at the close of 2023. According to sources, the company’s salary burden stands between Rs 40 crore and Rs 50 crore.
Lad disclosed that around 160 to 200 employees had approached the Labour Department, citing total outstanding dues of about Rs 4.5 crore. The department has also been inundated with emails from former Byju’s employees lamenting their prolonged wait for full and final settlements after termination from the company.
In response, Byju’s, the sources said, assured the Labour Department that it will settle all dues within a month of receiving a relief order from the NCLT.
However, the company is besieged by myriad challenges, including a severe cash crunch, delays in financial reporting, and a slew of legal disputes with lenders and investors. At least seven vendors have also moved the NCLT against Byju’s to recover dues.
Byju’s on Wednesday had requested the NCLT for 48 hours to decide whether to refrain from pledging, selling, or transferring its assets amid an ongoing investor dispute. Earlier this year, US-based lenders initiated corporate insolvency proceedings against the edtech company at the NCLT’s Bengaluru Bench. The ad hoc group of lenders, which extended $1.2 billion in term loans to Byju’s, said that GLAS Trust Company LLC had filed a petition against Think & Learn.
In another development, the NCLT Bench on July 3 reserved judgment on the insolvency pleas filed by telemarketing company Surfer and mobile phone maker OPPO against Byju’s. US-based McGraw Hill Education and customer experience solutions firm Cogent E-services have filed similar petitions.
In another case, the NCLT “asked” Byju’s to pay its employees’ salaries irrespective of whether it had access to the funds raised through its rights issue. The tribunal warned that failure to comply would result in an audit by the Institute of Chartered Accountants of India (ICAI).
While Byju’s has disbursed April and May salaries, full payments for February and March remain pending, the sources revealed. The delay has been attributed to the locking of funds raised through a recent rights issue due to the ongoing investor dispute. Company management, including founder Byju Raveendran, has assured employees that they will receive their dues regardless of the court’s decision.
The NCLT tussle between Byju’s and its investors centers around the company’s $200 million rights issue, with allegations of oppression and mismanagement. Investors Prosus, General Atlantic, Sofina, and Peak XV (formerly Sequoia) have sought a stay on the rights issue, challenging the valuation at less than 99 per cent of Byju’s peak valuation of $22 billion.
> McGraw Hill education and Cogent E-services have also filed similar pleas
> NCLT at Bengaluru on July 3 reserved insolvency pleas filed by telemarketing company Surfer and mobile phone maker Oppo against Byju’s for judgment
First Published: Jul 05 2024 | 6:43 PM IST