 "Karnataka Labour Minister presses Byju's to resolve former employees' dues")
Karnataka Labour Minister Santosh Lad held a meeting with representatives of Think and Learn Pvt Ltd, the parent company of the troubled ed-tech firm Byju’s on Monday (July 1). During the meeting, Lad urged the company to address the unpaid dues owed to former employees, as reported by Moneycontrol.
The report mentioned that after the discussion at Vikasa Soudha in Bengaluru, Lad said, “I have directed them to pay at least 50 per cent of the outstanding dues to the former employees promptly, with the remaining 50 per cent to be settled subsequently. They mentioned that their funds are currently in an escrow account with the National Company Law Tribunal (NCLT) and that a hearing is scheduled for July 4. Post-hearing, they will update us on the actions taken to clear the dues.”
Lad revealed that approximately 160 to 200 employees had approached the Labour Department, with total outstanding dues amounting to around Rs 4.5 crore. "Some employees have contacted us personally, while the majority have sent emails to our department,” Lad added.
Mohammad Mohsin, principal secretary of the Labour Department, told Moneycontrol, “They have assured us that they will settle all dues within a month of receiving a relief order from the NCLT.”
The Labour Department has received numerous emails from former Byju’s employees complaining about not receiving their full and final settlements months after their termination.
Karnataka HC reserves order on challenge against NCLT
Last week, the Karnataka High Court reserved its order on Byju’s challenge against an NCLT Bengaluru ruling that prevents the ed-tech firm from proceeding with a second rights issue. On June 12, the tribunal ordered Byju’s to maintain the status quo regarding existing shareholders and their shareholdings. Byju’s has appealed this order in the High Court.
Byju’s is currently prohibited from issuing shares and using funds raised from a $200 million rights issue until the tribunal reaches a decision. This matter is also set for a hearing on July 4.
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Byju’s failed to repay debt to Oppo
Meanwhile, smartphone manufacturer Oppo informed the NCLT Bengaluru on Thursday that Byju’s has failed to pay them Rs 13 crore for pre-installing their apps on their phones. The tribunal has designated July 3 as ‘Byju Day’ since nearly 10 petitions against the ed-tech firm are expected to be heard that day.
Oppo claimed that Byju’s had acknowledged the debt, making it a clear case for admitting the firm to insolvency to recover dues. The smartphone manufacturer also alleged that Byju’s promoters were absconding and no longer residing in India. Byju’s legal counsel objected to the term ‘absconding’ and requested an adjournment.
Prosus writes off stake in Byju’s
Additionally, investment firm Prosus has written off the value of its 9.6 per cent stake in Byju’s, marking one of the largest write-offs in tech startups by a prominent investor. Prosus reported a fair value loss of $493 million on its investment in the company in its FY24 annual report dated June 24.
“This year, the group wrote off the fair value of its 9.6 per cent effective interest in Byju’s due to a significant drop in value for equity investors. A fair value loss of $493 million was recorded in other comprehensive income for the current year,” stated Prosus in the report.
Since 2019, Prosus has invested $536 million in Byju’s over several funding rounds. A Prosus spokesperson stated, “We have reduced Byju’s valuation to zero by the end of FY24, resulting in a fair value write-down of $493 million for FY24.”