Founder of Byju's Byju Raveendran.
Photo Credit: Wikimedia Commons
New Delhi: Edtech firm Think and Learn, which owns Byju's brand, has not paid the July salary to employees as the company was unable to access its accounts due to a temporary stay granted by the Supreme Court on the NCLAT's decision, a top official said on Tuesday.
On August 2, the National Company Law Appellate Tribunal (NCLAT) approved the Rs 158.9 crore dues settlement with BCCI and set aside insolvency proceedings against Byju's. However, the Supreme Court on August 14 stayed the verdict of the insolvency appellate tribunal setting aside the insolvency proceedings against the ed-tech major based on a plea of US-based creditor Glas Trust Company LLC.
Think and Learn founder and CEO Byju Raveendran in an email to employees said that every legal roadblock has lengthened the company's long trek to recovery but the company is on the verge of reversing the negative business cycle that began two years ago.
"I want to address the matter of utmost concern to you - and to me as well. Your salary for July 2024 has not been credited yet. Our company recently faced a serious challenge that pushed us into insolvency due to a dispute with the BCCI. We settled the case and were on the brink of regaining control of our finances after the NCLAT ruled in our favour.
"The apex court has issued a temporary stay on the NCLAT's decision, which means the control of the company's accounts has not yet been restored to us," Raveendran said.
He said some foreign lenders have been litigating against the company and appealed the NCLAT ruling before the apex court.
"Founders are unable to infuse more capital to pay salaries like we have always done over the past many months. I guarantee this: When we regain control, your salaries will be paid promptly, even if that means raising more personal debt. This isn't just a promise - it's a commitment. We have investors ready to back our turnaround story," Raveendran said.
Foreign lenders have alleged that Byju's has used the money it raised from them in the US in violation of the contract.
Byju's had contested the claim, saying that the fund raised through Term Loan B (TLB) in the US was not used for the Board of Control for Cricket in India (BCCI) settlement.
"My brother, Riju, has taken full financial responsibility for settling Rs 158 crore with the BCCI. The funds used to discharge this obligation were sourced entirely from his finances, which were accumulated through the sale of his shares in Byju's between May 2015 and January 2022. These sales have been thoroughly documented, and the relevant income taxes have been paid as the law requires," Raveendran said.
He said the BCCI settlement was completed in full compliance with all legal requirements.
"We have submitted it under oath to the court. It clearly states that of the Rs 3,600 crore he earned from secondary share sales, approximately Rs 2,600 crore were reinvested into Byju's to sustain the company's operations, and Rs 1,050 crore were paid as income tax," Raveendran noted.
He said that over the past 29 months, Think and Learn's only source of capital was the founders.
"Founders together have infused approximately Rs 7,500 crore in the company for various operational needs. As a matter of fact, out of the Rs 3,976 crore disbursed as salaries to the team over the past two years, Rs 1,600 crore was infused by Riju personally.
"When was the last time you saw founders using their savings, even borrowings, to pay salaries for their beloved team members for more than two years?" Raveendran said.
In the email, Raveendran also mentioned that the Enforcement Directorate investigation against Byju's is restricted solely to procedural deficiencies under FEMA, such as delay in filing annual performance reports (APRs) with respect to duly compliant overseas investments arising from the delayed statutory audit.
"ED has not commenced any investigation against Riju or me in any personal capacity either," he said.
Raveendran refuted the allegation of Byju's founders being "fugitives" as he has travelled to India 10 times since March 2023 and spent 77 days in total, while Riju was in India just two weeks ago to pledge last personal asset.
He said that Byju's is still the largest ed-tech platform globally with 150 million students using the company's products and services every month.
"Despite the recent challenges faced, this organic user base has doubled over the last two years. Indeed, Byju's is transitioning to a sustainable business model that serves millions of students across India and employs thousands of people," he said.