Troubled edtech firm Think and Learn, the owner of the BYJU’S brand, has sought arbitration in the the matter involving miffed investors.
According to sources, BYJU’S contested the investor’s council allegations before the National Company Law Tribunal (NCLT) that the edtech firm violated the tribunal’s order by issuing shares to rights issue investors without completing the process of increasing authorised share capital.
“The respondent also tried to distract the NCLT by saying that the matter needs to be referred to arbitration. The petitioners’ counsel pointed to various case law and sections of the law that provide that such a matter cannot be referred to arbitration in view of the violations alleged and the prayer sought,” a source who was present during the hearing said.
This was the first hearing before the NCLT Bengaluru bench after BYJU’S held an extraordinary general meeting (EGM) on March 29 to increase authorised share capital of the company.
The EGM was held to increase authorised share capital of the company to complete the process for raising $200 million through a rights issue.
The company raised $200 million to meet its operational requirement, specially expenses related to employee salaries.
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A group of four investors, Prosus, General Atlantic, Sofina, and Peak XV, along with support from other shareholders, including Tiger and Owl Ventures, have approached NCLT against the EGM.
The petitioners’ counsel during the hearing pointed out the egregious breach of the undertakings given to the courts by BYJU’S, including with respect to no allotment of securities without increasing the authorised share capital.
The NCLT took strong objection to any such violation and allotment and stated that its orders have to be followed scrupulously and any violation shall be taken very seriously.
BYJU’S sources refuted the allegations.
“All allegations made by the foreign investor counsel were baseless. There was absolutely no violation of any of the interim court orders,” the source said.
The source further said BYJU’S will file necessary affidavits and detailed responses to counter allegations levelled by investor’s counsel.
“The NCLT, Bengaluru bench adjourned the matter to April 23,” the source said.
Edited by Swetha Kannan
