Karnataka High Court Restricts Byju's Share Allotment Till NCLT Decision On Rights Issue

Byju's investors had approached the NCLT to restrain the company from launching second rights issue, fearing it will dilute their holding.

The Tribunal had in its interim order restrained the company from allotting the shares. The interim order was challenged before the High Court, which set aside NCLT order as being non-speaking and cryptic.

The investors then preferred this appeal, where a division bench of Chief Justice NV Anjaria and Justice KV Aravind ordered status quo in regards to allotment of second rights issue. It said allotment of shares which may have taken place after Single Judge's order (from July 02) will remain subject to NCLT's final order.

The Tribunal has also been directed to decide investors' application against the second rights issue by July 31.

The investors had contended that if Byjus is permitted to continue to issue shares and other transactions till proceedings were decided by the NCLT, it will generate for them certain rights and create equities, even as the principal proceedings are pending.

Appearance: Senior Advocate Udaya Holla assisted by advocates Shankh Sengupta, Manasa Sudarraman and Mohammed Shameer for the appellant. Senior Advocate Gaurav Chopra assisted by advocate Yogesh Singh, Tine Abraham and Prarthna Bathija.

Senior Advocate K.G.Raghavan assisted by advocates Rishab Gupta, Manmeet Singh, Vikram Unni Rajagopal for respondent Nos.1 to 3.

Senior Advocate Dhyan Chinnappa assisted by advocates Sairam Subramanian, Saloni Shah,.Ashika Jain and Vikram Unni Rajagopal for respondent Nos.1 and 13 to 15.

Citation No: 2024 LiveLaw (Kar) 304

Case Title: GENERAL ATLANTIC SINGAPORE TL PTE LTD v. BYJU RAVEENDRAN

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