Byjus Alpha: Byju’s Alpha accused of hiding $500 million from lenders


Lenders accused one of India’s hottest tech companies of Byjus Alpha to hide $500 million amid a dispute between creditors and the self-proclaimed largest education tech company in the world.
The allegation came at a court hearing Thursday in Delaware, where Byjus Alpha faces a legal battle over who should control the company. Lenders claim they have the right to put their agent, Timothy R. Pohl, in charge following a default earlier this year.
The dispute is the latest setback for the successful start-up company Byju Raveendran. When state investigators raided the company’s offices in April, Byju’s had already been working to placate creditors trying to restructure a $1.2 billion term loan. The Bengaluru-based company has been working on an IPO of its tutoring division for several years.
Earlier this year, with the two sides locked in a standoff, a top Byjus Alpha executive “admitted to transferring half a billion dollars out of the company,” Brock Czeschin, one of Pohl’s attorneys, said during the hearing, which was conducted by was carried out telephone.
Byju’s Alpha tried to protect the money from predatory lenders, Joe Cicero, an attorney for Byju’s Alpha, said during the hearing. The company has the right to wire the money under the loan agreement, he said.
The company is up to date on all debt payments and any defaults should be considered technical breaches of the loan agreement, Byjus alpha attorney Sheron Korpus said in an interview.
future process
Delaware Chancery Court Judge Morgan Zurn made no ruling as to whether the money transfer was appropriate. Zurn sided with the lenders by instructing Byju’s alpha managers not to make any significant changes to the company. The judge has scheduled a trial later this year to decide who controls Byjus Alpha.
The lawsuit was filed by Glass Trust Company against Byju’s Alpha, its director, Riya Ravindranand Tangible Play Inc. The two sued companies are units of Think and Learn Private, the edtech empire founded by Byju Raveendran. According to a government application, Ravindran is also the director of Think and Learn.
Byjus Alpha is just a holding company that lenders need to control to protect their rights, Czeschin said during the hearing. The lenders weren’t trying to take over the entire edtech business, he said.
The lenders are distressed debt investors who are falsely trying to make a profit on the company’s debt, Byju’s Alpha claimed during the court hearing. The company will receive “a large capital injection” in about two weeks that will allow Byju’s Alpha to pay the $1.2 billion it owes its creditors, Cicero told the court.
The lenders “have started a campaign to hurt this business and they don’t want to continue the business,” Cicero told Zurn.
The case is Glas Trust Company v Riju Ravindran, 2023-0488, Delaware Chancery Court (Wilmington).

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