NCLT Directs Byju’s to Pay Salaries Amid Financial Crisis

The National Company Law Tribunal (NCLT) instructed embattled ed-tech company Byju’s to pay salaries regardless of whether it raised funds through its rights issue.

NCLT also warned the crisis-hit company that the Institute of Chartered Accountants of India will conduct an audit if employees are not paid.

NCLT Remarks on Company’s Revenue:

The Bengaluru bench of NCLT made these remarks while hearing a plea by employees seeking salary payment. The tribunal stated, “You are a functioning company. Surely, you should have revenues.” Byju’s has been directed to file a response to the employees’ application, and the plea has been listed for hearing in the coming week.

Byju’s reported that it has paid April and May salaries but has yet to fully make the February and March payments. The company explained that funds raised through the rights issue in February are inaccessible as they are held in an escrow account by NCLT order until the case is resolved.

Legal Challenges and Upcoming Hearings:

This issue arises as seven vendors sued Byju’s at NCLT to recover their dues. A high court division bench will attend the plea on July 5.

Additionally, according to the high court’s directions, it will rehear the plea for a stay on the company’s second rights issue on July 9.

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