Byju's will go ahead with its $200-million rights issue on Wednesday after the company law tribunal reserved its judgment in the oppression and mismanagement case filed by four large investors, according to people familiar with the matter.
The rights issue, aimed at keeping the company afloat, will close on Wednesday and any unsubscribed portion belonging to non-participating investors will be opened to existing investors, the people said.
Investors including Peak XV Partners and General Atlantic wanted the court to halt the rights issue, claiming coercion to participate or face reduced shareholding. The NCLT reserved the judgment.
According to the tribunal proceedings on Tuesday, investors also raised the creation of mortgages or dealings in company assets without adequate disclosure, raising questions about Byju's financial stability and decision-making transparency.
Investors also drew attention to a substantial reduction in Byju's market value, prompting a collective demand for a change in management. They submitted that they are reluctant to put any more funds in the company without the assurance of tribunal protection.
The rift between Byju's and its investors has intensified over the past month, with shareholders voting to oust Chief Executive Officer and founder Byju Raveendran and rejigging the board.
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