BYJU's seeks arbitration in investor dispute at NCLT

Embattled edtech firm Think and Learn, the owner of BYJU’s brand, sought for the matter involving disgruntled investors to be referred for arbitration.

BYJU’s challenged the allegations of the investor council before the National Company Law Tribunal, as per sources. 

The investor council accused BYJU’s of violating the tribunal's order by issuing shares to investors of the rights issue, without completing the process of increasing authorised share capital.

"The respondent also tried to distract the NCLT by saying that the matter needs to be referred to arbitration. The petitioners' counsel pointed to various case law and sections of the law that provide that such a matter cannot be referred to arbitration in view of the violations alleged and the prayer sought," a source present during the hearing said.

The NCLT has given 10 days to BYJU’s for filing its response in the matter, with the next hearing scheduled for 23 April.

A group of four investors - Prosus NV, General Atlantic, Sofina, and Peak XV Partners, with support from Tiger Global and Owl Ventures - had moved the the NCLT against BYJU's $200-million rights issue.

On April 3, the NCLT placed a plea by the investors to halt the rights issue before the tribunal president after a difference of opinion cropped up between members of its Bengaluru bench.

BYJU’s on March 29 concluded its EGM to increase the company's authorised share capital. There were no objections to the resolutions during the meeting, as per the sources.

CEO Byju Raveendran told miffed investors hours before the EGM that they could participate in the $200 million rights issue, which they had earlier also maintained distance from. None of those from the investor clutch participated.

PeakXV, General Atlantic and Prosus sought a stay on the March 29 EGM, which was not granted by the NCLT.

(With PTI Inputs)