Shareholders can’t oust CEO, says Byju’s as it again delays paying salaries to employees

BENGALURU: Edtech firm Byju’s has once again delayed paying salaries to employees even as the $200 million rights issue is likely to take at least 25 more days to be completed. “The success of the rights issue will ensure that we have sufficient operational capital to fund our short-term needs from March onwards,” the management said in a letter to employees.

The management also said the January salaries will be paid in a phased manner and will be completed by Monday.

In December 2023, Byju’s founder Byju Raveendran pledged his home to pay salaries. The letter, seen by TNIE, also said that there is a slight delay in salary disbursements because of the artificially induced crises by select investors. “Byju sir has personally shouldered the responsibility of paying our salaries over the past several months, including pledging his only home to ensure our financial security. This month is no different,” it said.

At least six shareholders of the company have moved a resolution to oust the founders from having control over the firm. But Byju’s on Friday said, “Under these unfortunate circumstances, we would emphasise that the shareholder’s agreement does not give them the right to vote on CEO or management change.”

“Byju Raveendran and his leadership team have kept Think & Learn Private Limited (TLPL), the parent of Byju’s, afloat after three investors left the company’s board last year, triggering a broader crisis. The company, along with the advisory board consisting of Rajneesh Kumar and Mohandas Pai, constituted a working group with the investors to find a constructive way forward,” the company said.

Byju’s and its leadership have updated the working group on crucial matters, including ongoing business restructuring, financial position and audits. “TLPL has been turning around the business, cutting the monthly burn to near operational breakeven and working on an AI-led technological refresh soon. In context, the actions of some unnamed investors are disruptive at a highly challenging time,” the company added.

Byju’s has not had any external investor funding for nearly two years apart from the founder infusing over $1 billion.

The letter sent by management to employees also stated that there are old liabilities to settle and short-term growth to secure. “All we need to do is fight with our leader…A wise person once said, ‘The struggle you are in today is developing the strength you need for tomorrow’s success.’ We all stand by Byju’s, with Byju sir.”

As on July 31, 2023, the company’s total employee count stood at 23,533. As part of the restructuring exercise, the company from September 2023 started firing nearly 4000 employees.