The June 12 NCLT order restrained Byju's from going further with the second rights issue.
The Karnataka High Court has observed the order by the National Company Law Tribunal (NCLT) restraining a second rights issue by edutech company Byju’s was “cryptic and unreasoned”. The single-judge bench of Justice S R Krishna Kumar set aside the order on Tuesday, with the detailed order made available on Wednesday.
The NCLT order on June 12 restrained Byju’s from going further with the second rights issue — an invitation to existing shareholders to purchase additional shares — that began till the disposal of another plea filed by major investors, who had raised concerns including dilution of their shares.
The bench observed that NCLT was yet to dispose of allegations of contempt made by investors against Byju’s with regard to its earlier order in February. “Absolutely no other reasons are forthcoming in the impugned order for the purpose of granting injunctive relief in favour of the respondents 1 to 5 (investors) against the petitioners; in fact, the triple test/requirement before granting interim injunction viz, prima facie case, balance of convenience and irreparable injury and loss/hardship has not even been adverted to,” observed the court regarding the order restraining Byju’s.
“The impugned order which is clearly a non-speaking, unreasoned, cryptic and laconic order without assigning any reasons as to why and how the respondents 1 to 5 (investors) would be entitled to an order of interim injunction against the petitioners and on this short ground alone, I am of the considered opinion that the impugned order passed by the NCLT deserves to be set aside,” added the court.
The matter was then remitted back to NCLT for fresh consideration.