Karnataka HC Overturns NCLT’s Halt on Byju’s Second Rights Issue: Report

The Karnataka High Court overturned a June 12 interim order from the National Company Law Tribunal (NCLT), Bangalore, that had prevented Byju’s from proceeding with a second rights issue. This is as per a report by Bar and Bench. The decision was pronounced by Justice SR Krishna Kumar, and he mentioned that the order has been sent back to the NCLT for re-consideration. The lawyer representing some of the investors urged the court to stay the order so that the rights of the shareholders were not diluted in the meantime. Investors such as Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative, and Prosus submitted a petition to the NCLT to stop Byju’s second rights issue. The investors argued that it would further dilute their ownership in the company. Following this, an interim order was passed by the NCLT that restrained the ed-tech firm from going ahead with its second rights issue. The ed tech firm was also asked to maintain the status quo of the existing shareholders. 

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