Rp 344T Startup Now Worthless, Employees Panic Over Unpaid Wages

Jakarta, CNBC Indonesia – The bankruptcy lawsuit against Byju, an Indian startup whose valuation had reached US$ 22 billion (Rp. 344 trillion), has made its employees restless.

Byju’s employees have apparently not received their wages for a long time. According to a Reuters report, teachers on the Byju platform have not received payments for months.

“Many people, including me, have stopped teaching because there is no point in continuing to ‘volunteer’ for companies,” Sukirti Mishra told Reuters in a video conference call.

Reuters spoke to 60 Byju’s employees on the video conference call. Mishra previously earned about $1,200 a month as a math tutor on Byju’s platform.

Now Mishra is willing to accept complaints and insults from students who are disappointed because he refuses to give classes because he has not received wages for a long time.

Around 27,000 Byju’s employees who have not been paid for 3 months are reportedly planning to take to the streets or sue Byju’s.

As many as 280 Byju’s employees have also complained to the government because the taxes deducted by the company from their salaries were not paid to the state.

Reuters was also invited into three WhatsApp groups containing more than 2,200 employees and parents whose entitlements Byju’s had not paid.

Byju’s founder and CEO Byjy Raveendran tried to reassure his employees and promised to pay their salaries after he returned to control the company.

“I assure you, when we regain control, your salaries will be paid immediately,” Raveendran said.

Byju is now controlled by a court-appointed officer because it is in the liquidation stage, which is similar to PKPU in Indonesia. The plaintiffs of Byju’s PKPU are creditors from the United States, who are already irritated because Byju has not paid a US$ 1 billion debt.

Byju’s employees face uncertainty as the liquidation process could take months. The existing law also does not guarantee that all employee rights will be fulfilled before Byju’s other obligations, including debts, are met.

The education technology company has also been hit by a number of other problems that have left investors thinking their shares in Byjutak are worthless.

Prosus is one of the largest investors in Byju with ownership reaching 9.6 percent. Prosus’ shares in Byju were worth US$ 2.1 billion (Rp 34 trillion) when Byju’s valuation soared to Rp 360 trillion.

In its recently released quarterly report, Prosus stated that its stake in Byju is now worth zero due to its decline in value to equity investors.

Byju is an education startup operating in South Asia and the Middle East. The company is currently facing various financial and governance issues.

Byju’s problems came to light when the company repeatedly delayed the release of its financial statements. When the financial statements were finally published, Byju’s revenues were far below projections.

Prosus, a major startup investor that owns stakes in Tencent and OLX, is among those that have withdrawn its representation from Byju’s board, accusing Byju of ignoring shareholders’ advice.

Byju’s investors also said the company’s management lied about the $200 million fundraising announced this year.

HSBC also assessed Byju’s stock price as almost worthless. In its research, HSBC assessed Prosus’ ownership of 10% of Byju’s shares as no longer worth considering.

SOURCE : CNBC INDONESIA