SUMMARY
BYJU’S has claimed that the judge threw out the lenders’ request for a mandatory injunction that sought the deposition of the $533 Mn with the court
BYJU’S said that the lenders were working with “certain large investors” of the edtech major to make windfall gains and exploit the situation
Just a day before, a US insolvency court had issued a warrant for the arrest of the manager of the hedge fund over the alleged missing $533 Mn
Just a day after a US bankruptcy court issued orders for the arrest of a hedge fund manager for allegedly helping BYJU’S hide $533 Mn, the edtech major has shot back, accusing its term loan B (TLB) lenders of being opportunistic and building fake narratives in the media to tarnish its image.
In its statement released on Friday (March 15), BYJU’S claimed that the judge on Thursday (March 14) quashed the lenders’ request seeking the deposition of the $533 Mn with the court.
The edtech major said that the bankruptcy court rather ordered an interim injunction maintaining the status quo in the matter and preventing the transfer of the said funds.
“This order merely maintains the status quo because we have always maintained that the said funds are safely parked in one of our subsidiaries and, as per the order, it will rightfully remain there. In fact, the court denied the primary relief requested — that a mandatory injunction be granted depositing the monies into court,” a BYJU’S spokesperson said.
The Bengaluru-based company also claimed that the legal counsel for BYJU’s Alpha, a subsidiary controlled by BYJU’S lenders, admitted that the creditors had “personally” verified that the $500 Mn were parked with a subsidiary of the company in early-2023.
The spokesperson added that the group of lenders was working with “certain large investors” of the edtech major to make windfall gains and exploit the situation. It did not further elaborate on what the said situation was but hinted at the ongoing series of crises at the company.
Accusing the lenders of levelling baseless allegations, the edtech major also called the lenders “opportunistic”, adding that the creditors were working with the “sole intention of extracting punitive monetary concessions”.
“There should be no doubt that we will continue to fight this falsehood for the sake of all our stakeholders, including the millions of students who we proudly serve. This case represents a concerning attempt by a group of opportunistic foreign lenders to exploit an Indian startup by levelling baseless allegations with the sole intent of extracting punitive monetary concessions,” the spokesperson said.
Just a day before, the insolvency court reportedly issued a warrant for the arrest of the manager of the hedge fund Camshaft, William Cameron Morton, after he refused to appear before the court, saying he was hospitalised in a foreign country.
The court also directed that the hedge fund would be liable for a fine of $10,000 per day until it cooperates with the investigation into the missing funds.
This adds to the long list of troubles that BYJU’S is facing. The edtech is also involved in a public standoff with investors over a $200 Mn rights issue, which was executed at a valuation cut of 99%. The aftermath saw the backers convening an extraordinary general meeting (EGM) to oust the CEO and founder Byju Raveendran and the reconstitution of the company’s board.
Alongside, a funding crunch also prevails over the company, forcing the edtech major to delay salaries and payments to vendors.
