A Division Bench of the Karnataka High Court on Friday directed Byju’s to maintain status quo while the National Company Law Tribunal (NCLT) at Bengaluru reconsiders the question of whether the ed-tech firm should be restrained from proceeding with a second rights issue.
On Thursday(28th June),The Karnataka High Court reserved its decision on a petition challenging the NCLT’s interim order that restrained Byju’s from a second rights issue, with the final order due on July 2. Justice SR Krishna Kumar clarified that the hearing focused on the validity of the NCLT’s order, not the cross-allegations between Byju’s and its investors.
US lenders filed involuntary Chapter 11 cases against Byju’s subsidiaries Neuron Fuel Inc., Epic! Creations Inc., and Tangible Play Inc. accusing misappropriation of funds. Byju’s founder is accused of breaching debt agreements. Byju’s US lenders also sought to prevent the company from pledging, selling, or transferring its shares. Byju’s intends to contest the case.
The NCLT Bengaluru bench Today(on April 3rd), issued a split decision on Byju’s investor plea, potentially leading to a third member’s involvement. The case concerns Byju’s EGM and rights issue, challenged by four investors alleging mismanagement and transparency issues. Byju’s is restrained from utilizing funds raised until the dispute is resolved, affecting salary disbursements.
Today, a lending company based in the US alleged that Byju’s had failed to make payments totaling more than Rs 8,000 crore. National Company Law Tribunal (NCLT) in Bengaluru issued a notice regarding a petition filed by international lender Glas Trust LLC. The petition seeks the commencement of insolvency proceedings against Think & Learn Pvt Ltd, the parent entity of the educational technology startup Byju’s.
The Karnataka High Court has granted interim relief to Byju’s founder, Byju Raveendran, blocking potential ouster in the upcoming extraordinary general meeting (EGM). The court has deemed proposed resolutions invalid until the final hearing, securing Raveendran’s position. Byju’s has invoked legal provisions to assert that the EGM was scheduled without following proper procedures, emphasizing the invalidity of the resolutions proposed during the meeting. Amidst this legal battle, lenders have filed insolvency proceedings, posing further challenges for Byju’s.