BYJU'S accuses investors of 'conspiring' against company, delays employee salaries
BYJU'S leadership has accused some investors of plotting to remove top executives during a challenging time, as stated in a letter to employees. The letter stated, "Certain investors, seeing the crisis we faced, saw it as an opportunity to conspire and demand the stepping down of our founder as the group CEO of BYJU'S." This development follows investors' call for an extraordinary general meeting to address governance, financial mismanagement, and compliance concerns at the edtech firm.
BYJU'S admits 'slight delay' in salaries to employees
BYJU'S announced that its $200 million rights issue for current shareholders has been oversubscribed while admitting a 'slight delay' in salary disbursements for January. If a rights issue is oversubscribed, a company can issue more stocks to satisfy demand. The letter said it was because of an artifically induced crisis by select investors that is making it difficult to process salaries. The company assured that salaries will be distributed in phases, beginning on February 2 and concluding by February 5.
Byju Raveendran pledges home to ensure financial security
Byju Raveendran, the founder and CEO of BYJU'S, has reportedly pledged his home to raise funds to pay employees during the cash crunch. In an emotional note, the letter mentioned, "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."
BYJU'S faces multiple issues including mass layoffs, miss-selling products
Since the beginning of 2022, BYJU'S has faced criticism for issues such as accounting irregularities, alleged mis-selling of courses, and mass layoffs. The company has let go off thousands of employees in the past year due to dwindling funding and a slowdown in demand for online learning services. Investor board members have also departed, citing disagreements with the founder. The company is also facing legal troubles with its US subsidiary BYJU'S Alpha over a $1.2 billion loan.
BYJU'S measures include divestment, advisory council and a new CEO
So far, BYJU'S has reacted to its deepening financial crisis by accumulating capital from its early investor Ranjan Pai. The edtech company has also set up an advisory council to guide it through the crisis. The council has experts like Mohandas Pai and Rajnish Kumar. It also promoted Arjun Mohan as the CEO of its India unit. Additionally, BYJU'S is reportedly scrambling to divest assets like Great Learning and Epic.
