Key Points
The court directed that they (Byjus) cannot complete the rights issue until they call for an EGM (extraordinary general meeting) to increase authorised capital and take shareholder approval before proceeding for rights issue..
In the court, lawyers representing the investors are learnt to have argued that they have no visibility on how the funds raised through the rights issue will be used given there are so many ongoing investigations against the company...
We have requested the company to provide information covering a broad range of matters. There are 13 letters we have written between the end of 2022 and end of 2023 asking for information, the investors lawyers argued, adding that the company will not survive solely on the basis of the money coming in from the issue...
In a recent letter to shareholders, founder and CEO Raveendran had said that the startup will appoint a third-party agency to monitor the usage of funds raised through the issue..
Through the petition, the investors are also seeking a forensic audit of the company and a directive to be issued to the startup against taking any corporate actions that will prejudice the rights of the investors...
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