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NCLT declines to stay EGM called by troubled Byju's over $200 million rights issue

Jaya Vishwakarma
New Update
NCLT byjus

The National Company Law Tribunal (NCLT), Bengaluru, has declined to halt BYJU'S upcoming extraordinary general meeting (EGM) scheduled for March 29. 

The meeting is crucial for the troubled edtech giant as it seeks to increase its authorized share capital in light of a $200 million rights issue. The decision comes amidst a backdrop of legal challenges and allegations of oppression and mismanagement by a faction of the company's investors, including Prosus, General Atlantic Singapore, Peak XV Partners, and Sofina.

Investor rebellion and legal battles

The refusal to stay the EGM marks the latest episode in the ongoing conflict between BYJU'S and some of its investors. These investors had previously sought legal intervention from the NCLT, Karnataka High Court, and even the Supreme Court to block the rights issue and challenge the company's management decisions.


The investors complaints stem from allegations of mismanagement and a contentious $200 million rights issue that was concluded at a valuation cut of 99%, a move that has significantly diluted the company's valuation from its peak valuation of $22 billion.

What did the court say on corporate governance?

The NCLT's view that decisions made at the EGM can be challenged but not stopped before they happen. The perspective was echoed in the tribunal's directive for BYJU'S to maintain the proceeds from the rights issue in a separate escrow account.