Bengaluru/New Delhi, Feb 27 (IANS) Key investors in embattled edtech company Byju’s on Tuesday argued at the National Company Law Tribunal (NCLT) hearing here that the process adopted by the company for its $200 million rights issue is “in breach of laws”.
They argued that the board of directors at Byju’s needed to call an Extraordinary General Meeting (EGM) of shareholders before the rights issue where they could vote.
“The board of directors did not call a general body meeting before rights issues as they are aware that the general body is not in their favour,” argued the lawyer on investors’ behalf.
“Our 25.4 per cent stake will come down to 2.5 per cent if we don’t subscribe to the rights issue. If we subscribe, we don’t know what happens to our money,” the select investors said at the hearing.
“There are investigations ongoing and we are given zero information,” they claimed.
Byju’s argued that the investors were “forum shopping” by approaching the NCLT.
“If the NCLT passes any order today, it will dilute the order of Karnataka HC,” the company’s lawyer argued.
“The investors are not looking at the interest of 100 million students and the 12,000 employees but only at their value maximisation,” the lawyer added.
“It’s logical that their shareholding will fall if they don’t subscribe. The last few months have been tough for the company. In these tough times, we are not hiding from making tough decisions for the company,” said Byju’s.
“It has been 21 months since our last capital raise,” the company added.
Meanwhile, the government has expedited the inspection of financial books of Byju’s and according to the company, it has responded with all necessary responses along with documents to the Ministry of Corporate Affairs (MCA) and is hoping for an early closure of the matter.
–IANS
na/uk
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