Summary – BYJU’s International Investors Deny Plea in NCLAT
• Investors, led by Dutch investor Prosus, accused BYJU of breaching the National Company Law Tribunal’s judgment.
• BYJU issued shares without raising its authorized share capital, using funds from a rights issue.
• NCLAT judges denied involvement in cases “yet to mature” at NCLT, stating they cannot substitute NCLT’s actions.
• Investors have not submitted an application or affidavit on the alleged infringement of the interim order by BYJU’S.
On June 6, the National Company Law Appellate Tribunal (NCLAT) Chennai bench denied a plea submitted by a few of BYJU’s international investors. These investors had requested an order to stop the current proceedings in the National Company Law Tribunal’s Bengaluru bench (NCLT).
Byju’s was accused by a group of investors, headed by Dutch investor Prosus, of breaching the tribunal’s judgment on April 23 when it issued shares to subscribers without raising its authorized share capital, utilizing the funds from a rights issue.
The judges of NCLAT notified the investors’ attorney that they were unable to get involved in cases that were “yet to mature” at NCLT since they were an appeal court. The bench said, “We cannot substitute the actions of NCLT. We cannot issue an order on a matter that is yet to be decided by NCLT.”
The investors had not even formally submitted an application or an affidavit on the purported infringement of the interim order by BYJU’S, BYJU’S attorney noted.
He highlighted the investors’ flagrant disrespect for due process, saying, “They haven’t even filed a petition for contempt in NCLT and yet, they have come here to argue as if NCLAT must suo moto take it up for hearing.
” The investors’ insufficient petition and absence of necessary paperwork were also pointed out by the court. “We can be your worst enemy if you don’t provide complete records,” the bench threatened.
Byju’s legal representative argued that the investors had not formally submitted an application or an affidavit regarding the edtech company’s purported breach of the interim injunction.
A portion of the lenders in the group that gave Byju’s $1.2 billion had filed a petition with a US court to file for bankruptcy on behalf of the company’s Epic, Tynker, and Osmo subsidiaries, according to a report published by ET on Wednesday.
CONCLUSION : The National Company Law Appellate Tribunal (NCLAT) Chennai bench denied a plea from international investors, including Dutch investor Prosus, who accused BYJU of breaching the tribunal’s judgment by issuing shares without raising authorized capital.
