Byju’s, the embattled edtech giant headquartered in Bengaluru, faces a looming payroll crisis as it struggles to meet its financial obligations. With more than 20,000 employees anxiously awaiting their February salaries, the company is poised to miss the March 10 deadline due to complications surrounding its recent rights issue.
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The Bengaluru bench of the National Company Law Tribunal (NCLT) had instructed Byju’s to segregate the proceeds from its rights issue, amounting to approximately $250-$300 million, until the resolution of pending legal matters with investors. However, the funds remain inaccessible, leaving the company unable to fulfil its salary commitments.
Sources close to the matter indicate that Byju’s is hampered by the ongoing status quo, exacerbated by the closure of banks over the weekend. Despite the company’s efforts to navigate these challenges, it has yet to provide clarity on the situation.
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Byju Raveendran, the company’s founder and CEO, previously assured employees of timely salary disbursements, stating, “We are striving to ensure that your salaries are paid by March 10.” However, a recent communication to staff revealed the persistence of financial hurdles, despite the successful closure of the rights issue.
In a candid letter addressing the workforce, Raveendran expressed regret over the inability to process salaries, attributing the delay to external pressures. He lamented the actions of certain investors, accusing them of obstructing the utilization of raised funds for payroll purposes.
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Amid mounting concerns, Byju’s moved to reassure stakeholders that funds have not been misappropriated, highlighting the existence of $533 million in a secure non-US subsidiary. However, the company‘s ability to resolve its immediate financial predicament remains uncertain, leaving employees in limbo as they await further updates.
