Byju’s Investors Make Fresh Allegations On Rights Issue

Investors have claimed the company has defied the NCLT's order and allotted shares in the rights issue before increasing its authorised capital.

<div class="paragraphs"><p>Byju Raveendran. (Source: Company website)</p></div>
Byju Raveendran. (Source: Company website)

While the Byju’s rights issue is likely to be decided after the appointment of a third member to the deciding NCLT bench, investors in edtech have come up with fresh allegations.

In a February order, the National Company Law Tribunal directed the startup to not allot shares to investors who participate in the rights issue unless it manages to increase its authorised capital. For this, an EGM was conducted on March 29. 

Now, the investors have claimed before the tribunal bench that the company has defied its order and allotted shares before increasing the authorised capital. Investors also claimed that Byju’s announced the results of the EGM before all the postal votes were counted, which wasn't fair.

The EGM was conducted after the NCLT refused to halt it in last week's hearing and also refused to appoint an independent person to oversee the meeting.

Byju’s has filed an application to refer this dispute with the investors to arbitration and also denied the claims of defying the tribunal order. 

The tribunal asked the company to file a response to these allegations, while the investors were asked to file their reply on whether they wish to refer the dispute to arbitration. 

The matter is likely to be heard on April 23.

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