Bengaluru/New Delhi, February 27: Key investors in Byju's alleged on Tuesday that the Enforcement Directorate (ED) is investigating diversion of funds of over $500 million by the edtech company to a hedge fund in the US. In the ongoing hearing at the National Company Law Tribunal (NCLT) in Bengaluru, the investors alleged that the address of the hedge fund was a "pancake shop" and its founder "is a 23-year-old without any training".

"About $533 million has been siphoned off. He (Byju Raveendran) wants us to invest more money. How will we be protected?" Byju’s key investors -- Prosus, General Atlantic, Sofina and Peak XV -- have moved the tribunal against the embattled edtech major over its $200 million rights issue. Paytm Employees Fear Potential Layoffs As RBI’s Deadline Nears on March 15, Still Employees Are Motivated and Trying To Address Compliance Issue: Report

During the hearing, the investors claimed that "if the amount is parked in their bank account especially when the man is sitting abroad and is not coming to India, it will become irreversible". Earlier in the day, the investors argued that the process adopted by Byju’s for its $200 million rights issue is "in breach of laws". They said that the board of directors had to call an Extraordinary General Meeting (EGM) of shareholders before the rights issue so that they could vote.

"The board of directors did not call a general body meeting before rights issues as they are aware that the general body is not in their favour," argued the lawyer on investors' behalf. "Our 25.4 per cent stake will come down to 2.5 per cent if we don't subscribe to the rights issue. If we subscribe, we don't know what happens to our money," the investors said. SpaceX: US Federal Aviation Administration Ends Investigation of SpaceX’s Starship Super Heavy Orbital Test Flight 2 Launch Mishap.

Byju’s argued that the investors were “forum shopping” by approaching the NCLT. "If the NCLT passes any order today, it will dilute the order of Karnataka HC," the company's lawyer said. "The investors are not looking at the interest of 100 million students and the 12,000 employees but only at their value maximisation." "It has been 21 months since our last capital raise," the company added.

(The above story first appeared on LatestLY on Feb 27, 2024 06:34 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website