Byju's management, in a letter to employees, accused the shareholders for a "slight delay in salary disbursements this month because of the artificially induced crisis by these select investors." This information was disclosed in a collective email from the management, which was seen by Moneycontrol.
"...We must address an unfortunate development. Certain investors, seeing the crisis we faced, saw it as an opportunity to conspire and demand the stepping down of our founder as the group CEO of BYJU'S. We are pained to see this action from a few of the investors who should have supported us in our fight at these challenging times, instead of directly speaking to media. The founders are the largest investors and the greatest fighters for BYJU’S," the letter said.
"In three short days, since we launched our rights issue, we have already received commitments for more than 100 percent of the proposed amount. This process will take 25 more days to complete. It will ensure we have enough growth capital, and also to meet all operational liabilities," said the letter.
This claim was made amidst a backdrop of various challenges faced by the company, including allegations of financial mismanagement and calls for a change in leadership. The company's financial troubles came to light following a notice from a group of investors calling for an Extraordinary General Meeting (EGM) to discuss a potential change in Byju's management and board, citing ongoing issues within the company.
The situation at Byju's had reached a point where the company's founder and CEO, Byju Raveendran, was personally ensuring the payment of salaries, even going so far as to pledge his only home to secure the financial stability of his employees. Despite the turmoil, Byju's announced a $200 million rights issue for existing shareholders, which was reportedly oversubscribed within days, indicating some level of investor confidence in the company's future.
The management subsequently provided assurance that salaries would be disbursed in stages, commencing from February 2 and concluding on February 5.
The management stated, "Byju sir has consistently taken personal responsibility for our salaries, even going to the extent of pledging his only home to ensure our financial security. This month is no exception."
The management expressed their distress over the situation in the email to employees, emphasizing that the successful completion of the rights issue would mark the beginning of Byju's recovery phase. They estimated that the process would take an additional 25 days to complete, which would then enable the company to meet all operational liabilities and support growth capital.
This financial strain comes amidst reports of high salaries within the company, with the highest-paying job being that of a Vice President Engineering, earning Rs 119.0 Lakhs per year. The top 10% of employees at Byju's earn more than Rs 13.50 lakhs per year, while the top 1% earn over Rs 40.04 lakhs annually. In Bangalore, the average salary at Byju's ranges from approximately Rs 3,00,000 per year for a BDTS Team to Rs 72,28,556 per year for a Vice President, with hourly pay for teachers averaging around Rs 550.
The salary delay and the ensuing cash crisis have raised concerns among Byju's employees and stakeholders, as the company navigates through this challenging period.
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