The Karnataka High Court on Tuesday set aside a June 12 interim order passed by the National Company Law Tribunal (NCLT), Bangalore which had restrained the edtech firm, Byju’s from going ahead with a second rights issue.
According to Bar and bench, Justice SR Krishna Kumar pronounced the decision on Tuesday, after having reserved orders in the matter last week.
The judge said that the order has been passed on merits and that the matter has been sent back to the NCLT (possibly for reconsideration) for further hearing, Bar and Bench reported.
A lawyer representing certain investors requested the Court to stay the operation of Tuesday’s order so that it may be challenged and no shareholder rights are diluted in the meantime.
The Court, however, refused to stay the order’s operation.
Justice Kumar observed that he had given an opportunity earlier for all rival sides to arrive at an agreement so that an order may be passed on consent to send the matter back to the NCLT.
However, since no such consensus has been arrived at, the matter has now been decided on merits, he said.
The detailed judgment would be made available on Wednesday, the judge added, according to the report.
The Court on Tuesday allowed two petitions filed against the NCLT’s decision to issue an interim stay on a second rights issue by Byju’s. On June 12, the NCLT had passed an interim order on a petition filed by four investors (MIH EdTech Investments, General Atlantic Singapore, Peak XV Partners Operations LLC and Sofina) which accused Think & Learn, the parent company which owns Byju’s, of oppression and mismanagement. The interim order restrained Byju’s from proceeding with its second rights issue till the main petition of the four investors was disposed of. The move was challenged in the two writ petitions filed by Think & Learn as well as its founder-CEO, Byju Raveendran and executive directors Riju Raveendran and Divya Gokulnath. Appearing for the petitioners, senior advocates KG Raghavan and Dhyan Chinnappa argued that the NCLT’s interim order of stay was liable to be set aside as it was bereft of reasons. On the other hand, senior advocates Udaya Holla and Satish Parasaran, appearing for investors, maintained that Byju’s and Think & Learn had violated an earlier undertaking to the NCLT to not proceed with the rights issue.
