New Delhi:

US lenders represented by Glas Trust have countered BYJU’s founder Byju Raveendran’s claim on verified debt on the company being merely around Rs 20 crore, and have said that the beleaguered edtech firm will have to pay the entire USD 1.2 billion Term Loan B along with interest.

The founder of Think and Learn (TLPL) and owner of BYJU’S brand, Byju Raveendran, had about a week ago said that verified debt on the company is only Rs 20 crore as per insolvency proceedings and he may not have to pay any money to the US lenders represented by Glas Trust.

“Neither Byju nor the IRP have the authority to disqualify any term loan lender ‘and even if they did, BYJU’s would still be obligated to repay the full amount of the loan plus interest. Any argument otherwise is illegitimate, and Byju knows it,” a steering committee of the ad hoc group of term loan lenders to Byju’s Alpha, Inc said in a statement.

Glas Trust has sued BYJU’S for the recovery of USD 1.2 bn TLB in US as well as in India.

The financial trouble of once the most-valued Indian edtech firm BYJU’S started after US-based lenders started legal action against the company to recover USD 1.2 billion TLB.

The lenders have alleged that BYJU’S group firm BYJU’S Alpha secured USD 1.2 billion Term Loan B , which is a loan given by institutional investors, and moved USD 500 million out of the US in breach of loan agreement norms.

BYJU’S has countered the allegation levelled by the lenders.

The lenders panel said almost all key personnel have abandoned BYJU’s, including the chief executive officer, chief financial officer and General Counsel, and it has now seen a second auditor resign in less than two years due to BYJU’S inability to explain away the whereabouts of the USD 500 million, among other reasons.

According to BYJU’S, lenders represented by Glas Trust wrongly accelerated the loan in March 2023 which was to be repaid in November 2026.

The Insolvency Resolution Professional (IRP) has not admitted USD 1.35 billion debt claim made by Glas Trust during an ongoing insolvency proceedings against BYJU’S.

The lenders’ panel said BYJU’S does not have the power to disqualify any lenders and the power belongs exclusively to Timothy R Pohl, as the sole director and officer of BYJU’s Alpha, Inc, as recognized by the Delaware court, and Pohl has never disqualified any lender.

The lenders’ panel said that Raveendran continues to make false statements to the public in a desperate effort to conceal that he very likely orchestrated the theft of more than USD 500 million and shift the blame for his failures in managing Think & Learn.

Raveendran, however, maintains his stand on Glas Trust represented lenders that they are not eligible to recover dues.

“Under the credit agreement, not just The Borrower but even the parent company TLPL has the right to disqualify Lenders. Tim Pohl is simply a nominee of the lenders. He does not have any powers to disqualify lenders, nor can his nomination take away the contractual right that TLPL has to disqualify lenders,” Byju said.

The lenders’ panel also countered Raveendran’s statement that Glas-represented lenders will have to prove that they are not a distress fund in New York court to proceed on their demand which is difficult for them.

“Whether any lender is a ‘distressed fund’ is not on trial in New York. Additionally, the New York litigation is not a prerequisite to these proceedings,” the panel said.

“The price of the TLB instrument has no bearing upon the validity of Glas’ claim or the amounts owed by BYJU’s. BYJU’s borrowed USD 1.2 billion (plus interest). It does not need to pay more if loan trading prices go up, and it does not need to pay less if the loan trading prices go down. This is a basic tenet of how the finance markets work,” the panel said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The Court had issued notice to Byju Raveendran, his company Think and Learn Private Limited and the BCCI.
| Photo Credit: ANI

The Supreme Court on Thursday (August 22, 2024) did not heed repeated requests by debt-ridden ed-tech firm Byju’s and the Board of Control for Cricket in India (BCCI) to defer the Committee of Creditors (CoC) from meeting.

A three-judge Bench headed by Chief Justice of India D.Y. Chandrachud had, on August 14, stayed the operation of a National Company Law Appellate Tribunal (NCLAT) decision allowing Byju’s to pay a settlement amount of ₹158 crore to the BCCI.

Also Read: How India’s Byju’s went from startup star to facing insolvency

The order followed an appeal filed by U.S.-based lender Glas Trust Company Limited liability company (LLC), a financial creditor — which said it had a claim of ₹8,500 crore over the ed-tech firm.

On August 22, the Bench gave Glas Company, represented by senior advocate Shyam Divan, time to respond to an affidavit filed by the opposite party.

Senior advocate A.M. Singhvi, for Byju’s, said the court must “balance equities” on its side too. Solicitor General Tushar Mehta, for BCCI, said “98% of the CoC was Mr. Divan’s client”.

Mr. Divan said his client had not constituted a CoC. Senior advocate Kapil Sibal, who joined the hearing on the side of Mr. Divan, said the stay order on August 14 was itself a result of the court’s prima facie findings leaning in favour of Glas.

The NCLAT decision on August 2 allowing the settlement, was based on the reasoning that BCCI would not accept any tainted money. The amount of ₹158 crore was offered by Riju Raveendran, Byju’s brother. It was generated in India, for which income tax was paid. The money was received through banking channels.

Glas had argued that the “drill of the law” was not followed in the settlement between Byju’s and the BCCI. The U.S. lender had said, as a major financial creditor, it should have gotten priority in repayments. Mr. Singhvi had described Glas’s appeal as a show of ego.

“Apart from an ego, he (Glas) has a claim of ₹8,500 crore,” the Chief Justice reacted.

The Court had issued notice to Byju Raveendran, his company Think and Learn Private Limited and the BCCI.

Representational image of the Byju’s logo
| Photo Credit: Reuters

The Supreme Court on Wednesday (August 14, 2024) revived insolvency proceedings against Byju’s by putting a previous tribunal order on hold, in a victory for U.S. lenders that say they are owed $1 billion by the education technology company.

The Supreme Court order is a setback to company founder Byju Raveendran who earlier this month regained control of the startup that was once India’s most valuable at $22 billion.

ALSO READ: How Byju’s went from startup star to facing insolvency

Byju’s did not immediately respond to a request to comment on the court order.

The company was undergoing insolvency proceedings following a complaint by the BCCI which said it was not paid sponsorship dues. The two sides subsequently settled the dispute and an appeals tribunal halted the insolvency proceedings.

A revival of the proceedings will put control of the company back in the hands of a court-appointed insolvency administrator.

The Supreme Court on Wednesday agreed to hear an appeal by U.S.-based Glas Trust, which represents some lenders of a Byju’s group company, putting on hold the earlier order that had quashed insolvency proceedings against Byju’s.

Chennai:

A judicial member of the National Company Law Appellate Tribunal (NCLAT), Chennai, on Monday recused himself from hearing a plea by Byju’s Founder Byju Raveendran against the insolvency petition against his company, Think & Learn Private Ltd.

Justice Sharad Kumar Sharma, a judicial member of the Chennai bench of the NCLAT, recused himself stating that he had appeared for the Board of Control for Cricket in India (BCCI) as a senior counsel in a number of cases.

“I will not venture into this. I have been a regular counsel for the BCCI in a number of cases,” he said.

He also directed that the case be placed before the NCLAT Chairperson for the nomination of an appropriate bench.

The NCLT, Bengaluru, had ordered insolvency proceedings against Think & Learn Private Ltd following a BCCI petition claiming a default of Rs 159 crore.

The NCLT had earlier appointed Pankaj Srivastava as an interim resolution professional to oversee the management of Byju’s, temporarily suspending the power of the board of directors.

Byju Raveendran had moved the NCLAT against the insolvency proceeding order.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The logo of Byju’s, the EdTech startup.
| Photo Credit: Reuters

Indian edtech company Byju’s is staring at insolvency proceedings on July 16 following a tribunal order, deepening a crisis that has seen the one-time market darling’s valuation plunge from about $22 billion to less than $2 billion.

Byju’s, which describes itself as the “world’s largest education technology company”, offers online tutorials on several subjects including math, physics and chemistry for school students. Its business boomed during the Covid-19 pandemic and the company’s valuation shot up from $5 billion before the pandemic to $22 billion in 2022, and it acquired several companies on the way.

It is run by its founder, Byju Raveendran, and his wife, Divya Gokulnath. Mr. Raveendran, an engineer by training whose parents were teachers, started teaching mathematics to friends and built the business as its popularity grew. He launched Byju’s in 2011 and its app in 2015.

Here is an overview of Byju’s and its troubles:

What triggered the insolvency?

The BCCI last year asked a tribunal to initiate insolvency proceedings against Byju’s for defaulting on $19 million of dues. The dispute is over payments related to sponsorship rights for the Indian cricket team’s jerseys.

Byju’s has said it wants to settle the matter, but a tribunal ruled in favour of BCCI, and appointed a resolution professional to oversee the company, suspending its board of directors.

What’s the tussle with investors?

In February, a group of shareholders, including tech investor Prosus, alleged “financial mismanagement and compliance issues” at Byju’s and called for the removal of founder and CEO Byju Raveendran, and a reconstitution of the board. “We are deeply concerned about the future stability of the company under its current leadership and with the current constitution of the Board,” the shareholders said.

Byju’s, which has denied mismanagement, says the investors don’t have the power to vote out its CEO.

In June, Prosus wrote off the value of its 9.6% stake in Byju’s, making the Dutch firm the first to fully write-off its investment in the troubled startup.

Why did Deloitte, board members resign?

Last year, Deloitte said it was resigning as auditor because the startup had delayed financial statements for the year ending March 31, 2022. Deloitte said it did not receive the necessary documents even after writing several letters to the board.

Three board members of Byju’s — representing investors Peak XV Partners (previously Sequoia Capital India), Prosus and Chan Zuckerberg Initiative — also stepped down.

Byju’s, once one of India’s premier EdTech startups, now faces insolvency proceedings. File
| Photo Credit: REUTERS

An Indian tribunal on July 16 started insolvency proceedings for EdTech firm Byju’s after the country’s cricket board complained about failure to recover $19 million in dues, dealing another blow to a company that was once India’s biggest startup.

Byju’s has suffered numerous setbacks in the past few years, leading to a crisis of investor confidence, thousands of job cuts and a collapse in its valuation from $22 billion in 2022 to less than $3 billion.

Also read: Byju’s woes: A timeline of the Indian edutech giant’s troubles at home and abroad

In this latest blow, the National Company Law Tribunal (NCLT) said “it cannot be disputed” that the parent of Byju’s, Think & Learn Private Limited, had availed itself of the services of the Board of Control for Cricket in India (BCCI) and had defaulted on roughly ₹1.59 billion.

“As we have always maintained, we wish to reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached. In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the Company’s interests,” a spokesperson for Byju’s said.

The NCLT appointed an interim resolution professional, Pankaj Srivastava, who will now oversee the management of Byju’s. The powers of board of directors will be suspended for now and rest with Mr. Srivastava. BCCI did not immediately respond to a Reuters request for comment.