Byju's Investors File Caveats Before Supreme Court After NCLT's Rights Issue Order
A caveat ensures that the party filing it is heard when an appeal is heard by the court.
Four investors involved in a dispute concerning investor oppression and mismanagement at Byju's have filed caveats before the Supreme Court.
This was in anticipation of an appeal against a National Company Law Tribunal order that allowed the edtech giant to move ahead with its $200 million rights issue.
Peak XV Partners Investments, MIH Edtech Investments BV, Sofina SA and General Atlantic Singapore TL Pte filed their respective caveats before the top court on March 4.
A caveat ensures that the party filing it is heard when an appeal is heard by the court.
In an interim order dated Feb. 27, the NCLT directed that the funds received by the company in respect of the rights issue should be kept in a separate escrow account and should not be withdrawn until the matter is finally disposed of.
The NCLT had also asked embattled Byju's to consider extending the closing date of the $200 million rights issue, which was supposed to close on Feb. 29.
Investors in Byju's have alleged that the edtech giant siphoned off $533 million in an obscure hedge fund in the U.S. and sought a stay on a $200 million rights issue, calling it illegal and contrary to law.
According to the proceedings before the NCLT on Feb. 27, investors also raised the creation of mortgages or dealings in company assets without adequate disclosure, raising questions about Byju's financial stability and decision-making transparency.
The rift between Byju's and its investors has intensified over the past month, with shareholders voting to oust Chief Executive Officer and Founder Byju Raveendran and rejig the board.
However, the Karnataka High Court has said that the decision to oust Raveendran will not be implemented before the court hears the case on March 13.
