Byjus crisis: Edtech company likely to miss March 10 deadline to pay salaries

The company seems unable to pay salaries due to the status quo, as banks will also remain closed this weekend.

New Delhi: Embattled edtech firm Byju’s is likely to miss the March 10 deadline to pay salaries for the month of February to its over 20,000 employees as funds raised through the rights issue remain stuck.

The Bengaluru bench of the National Company Law Tribunal (NCLT) had directed Byju to keep the proceeds of the rights issue (which amount to around $250-$300 million) in a separate account until the matter was resolved with investors.

The company seems unable to pay salaries due to the status quo, as banks will also remain closed this weekend. The company did not immediately comment on the development, the report said.

Earlier this month, the company’s founder and CEO Byju Raveendran told employees that “we aim to ensure that your salaries are paid by March 10. We will make these payments when we are legally allowed to do so.”

In a letter to employees, Raveendran states that the rights issue has been successfully completed.

“However, I regret to inform you that we are still unable to process your salaries. Last month we faced challenges due to lack of capital, and now we are experiencing delays despite having funds,” he told more than 20,000 employees.

Raveendran further said that a select number of investors “have stooped to a heartless level, ensuring that we cannot use the money raised to pay your hard-earned salaries.” Meanwhile, the EdTech company said no money has been diverted and that approximately $533 million is currently tied up in a 100 percent non-US subsidiary of the company.