📷 Image Credits: Indian Legal News
In a recent development, the Karnataka High Court issued an order on July 5 directing Byju’s to maintain the status quo regarding a second rights issue proposed by the ed-tech company until a decision is made by the National Company Law Tribunal (NCLT). The order came following appeals by a group of investors after a single judge of the Karnataka High Court set aside an NCLT stay on Byju’s second rights issue. The NCLT order had previously directed Byju’s to maintain the status quo for existing shareholders and their shareholding, as well as restrained the company from proceeding with the second rights issue. Byju’s parent company, Think and Learn Pvt Ltd, along with Byju Raveendran, filed writ petitions against the NCLT order, leading to the matter being taken up by the Karnataka High Court. The recent High Court order also stipulated that any share allotments and related transactions made post the July 2 order will be subject to the final decision of the NCLT. The NCLT has been directed to consider the case independently and on its merits, without being influenced by any previous observations or orders, and decide on the matter by July 31. Importantly, the court clarified that it had not expressed any opinion on the merits of the case and urged the NCLT to decide the matter strictly on its own merits and in accordance with the law. The Byju’s case has attracted attention from prominent investors, including Prosus, General Atlantic, Peak XV Partners, and Sofina Ventures, who are in dispute with the company over a $200 million rights issue. Stay tuned as the NCLT is expected to provide a final decision on the rights issue aspect by the end of the month, following the High Court’s directive to maintain status quo amidst the ongoing dispute.