In the ongoing corporate saga of Byju’s, the Karnataka High Court has thrown a wrench in the works, ordering the ed-tech giant to maintain the status quo. This decision comes as the National Company Law Tribunal (NCLT) in Bengaluru re-examines the contentious rights issue at the heart of the dispute.
The drama began when four investors accused Byju’s and its parent company, Think & Learn Private Limited, of mismanagement and oppression, leading the NCLT to issue an interim order on June 12 halting the rights issue. The investors alleged that Byju’s breached a prior commitment not to proceed with any rights issue without increasing its authorized capital.
Fast forward to July 2, a single judge of the Karnataka High Court quashed the NCLT’s interim order, siding with Byju’s and its parent company, which argued that the tribunal’s decision lacked reasoning. However, the judge also sent the case back to the NCLT for a fresh review within two weeks.
Unhappy with the refusal to stay the order, the investors appealed, and the case landed before Chief Justice NV Anjaria and Justice KV Aravind. After hearing both sides, the High Court decreed that the status quo be maintained until the NCLT reaches a final decision on the rights issue. Any shares allocated post the July 2 order will hinge on the NCLT’s forthcoming verdict, expected by July 31.
During the proceedings, Senior Advocate Udaya Holla, representing the investors, warned that shareholder rights could be undermined if Byju’s proceeded with the rights issue before the NCLT’s decision. He noted that shares had already been allocated between July 2 and July 3.
Byju’s, represented by Senior Advocate KG Raghavan, assured the court of their commitment to maintaining the status quo and refuted claims of violating any undertakings. Raghavan also voiced concerns about the media’s portrayal of the case, stressing that ongoing proceedings should not influence public perception or the tribunal’s decisions.
With both parties in agreement on the interim status quo, the High Court concluded the appeals, emphasizing that the NCLT should independently adjudicate the matter without being swayed by the High Court’s observations.
This courtroom clash features a lineup of heavyweight legal talent on both sides. The investors are represented by a formidable team including Senior Advocates Udaya Holla and Gaurav Chopra, while Byju’s defense is led by Senior Advocates KG Raghavan and Dhyan Chinnappa, among others. As the legal wrangling continues, all eyes now turn to the NCLT’s impending decision, which will undoubtedly shape the future course of Byju’s corporate maneuvers.
