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Beleaguered edtech firm Byju’s has moved the Karnataka high court challenging the order of the National Company Law Tribunal (NCLT) restraining it from going ahead with the second rights issue.
The plea is likely to come up for hearing on Monday.
The orders of NCLT were expected to be challenged before the National Company Law Appellate Tribunal (NCLAT).
However, Byju’s has filed a writ petition in the Karnataka high court, which is usually filed against the violation of fundamental rights.
On June 12, NCLT Bengaluru told Byju’s to maintain the status quo with regard to the existing shareholders and their shareholding.
“Status quo with regard to existing shareholders and their shareholding shall be maintained till the disposal of the main petition,” the order that was made available on June 13, said.
This means that Byju's is restricted from issuing shares and using funds raised from a $200 million rights issue until the tribunal decides the matter. The matter will be heard on July 4.
The second rights issue started on May 13 and was expected to end on June 13.
With that, Byju's was not allowed to utilise any funds it had collected from the second rights issue, and the amount from the second rights issue had to be deposited in a separate account.
On January 29, the NCLT had directed Byju's to file the details of the concerned escrow bank accounts from the opening of the rights issue within 10 days from June 12.
According to industry sources, the legal battles are expected to adversely impact the edtech firm’s ability to run its operations, pay the pending amount to the vendors, as well as salaries to the employees.
