Byju Raveendran, founder and CEO of beleaguered edtech company BYJU'S, said the company will not be able to pay salaries to its employees as the funds raised through a rights issue recently cannot be accessed by the company due to a legal dispute with certain investors.
In a letter to the employees of BYJU'S, Raveendran assured that the salaries will be paid "the moment we are permitted to do so as per law."
The National Company Law Tribunal (NCLT) had recently asked BYJU'S to keep the funds, raised through rights issue, untouched.
Earlier this week, the court had asked BYJU'S to consider extending the closing date of the $200 million rights issue. The Bengaluru bench of the court had said the funds received by the company through the rights issue should be kept in a separate escrow account, and it should not be withdrawn till the disposal of the matter.
Raveendran said in the letter that the rights issue has been closed successfully.
"This was supposed to be a happy correspondence. After all, we now have funds to meet our short-term needs and clear our liabilities. However, I regret to inform you that we will still be unable to process your salaries," he said.
He said last month, BYJU'S was facing a tough time due to a lack of capital, and "now we are experiencing a delay despite having funds".
"Unfortunately, a select few (4 out of our 150 plus investors) have stooped to a heartless level, ensuring that we are unable to utilise the funds raised to pay your hard-earned salaries," Raveendran said.
"At their behest, the amount raised through the rights issue is currently locked in a separate account," he noted.
"It is an agonising reality that some of these investors have already reaped substantial profits - in fact, one of them has made a staggering eight times their initial investment in BYJU'S. And yet, their actions convey a callous disregard for our lives and livelihoods."
Raveendran said he is "leaving no stone unturned" to find a way to honour the company's commitment to employees.
"Countless hours have been spent exploring every possible avenue, engaging our legal teams, and advocating for your rights. However, despite our best efforts, we are left with no option but to confront the heart-wrenching reality that we are temporarily unable to provide you with the financial support you deserve," he said.
(With PTI inputs)
