NCLT asks for Byju's reply after investors allege company violated Tribunal orders

The investors who alleged oppression and mismanagement by Byju’s raised allegations in the National Company Law Tribunal (NCLT) at Bengaluru that the company may have violated its previous orders..The four investors - EdTech Investments, a subsidiary of Prosus NV; General Atlantic Singapore; Peak XV Partners Operations LLC; and Sofina approached NCLT in February.They filed an affidavit before a coram of judicial member K Biswal and technical member Manoj Kumar Dubey today recording their apprehension that Byju’s may have allotted shares amongst shareholders without increasing authorised capital.This, they claimed, was in violation of the orders dated February 27 and March 28 passed by the Tribunal..In the February 27 order, the Tribunal recorded Byju’s statement that there will be no allotment of shares without increasing the authorised share capital. Further, the money received in the rights offer will be kept in a separate account till the disposal of investors’ plea, it was submitted..The investors sought to defer Byju’s extraordinary general meeting (EGM) to increase its authorised capital till NCLT decides their plea. However, NCLT on March 28 refused to defer the EGM, which eventually took place on March 29.In the March 28 order, the Tribunal recorded Byju’s statement that it was holding an EGM only to increase the authorised capital of the company.Both these orders had allegedly been violated by Byju’s, the investors argued today..While Byju’s vehemently rejected these submissions, the coram granted the company 10 days time to reply to the affidavit. It also reiterated that the parties were required to scrupulously follow all interim orders of the NCLT.The matter will be next heard on April 23..Byju’s also filed an application under Section 8 of the Arbitration and Conciliation Act seeking arbitration of the disputes between the parties. The investors claimed that this application would not interfere in their petition and that NCLT ought to decide on their prayer seeking change of the company's board.However, the Tribunal raised a query if the arbitral tribunal could adjudicate on the allegations of oppression and mismanagement in a company.It permitted investors to respond to this application and posted this issue for hearing on April 23..Byju's was represented by Senior Advocates KG Raghavan and Dhyan Chinappa along with Advocates Rishab Gupta, Manmeet Singh and Sairam Subramanian, briefed by Saraf and Partners.The investors were represented by Senior Advocates Sudipto Sarkar and Satish Parasaran, with Advocates Shankh Sengupta, Tine Abraham and Yogesh Singh, briefed by Trilegal..[Read order]