Lenders have alleged that BYJU’S Alpha, a non-operative US entity of edtech giant BYJU’S, is concealing $500 million. The accusations surfaced during a court hearing on Thursday in Delaware, where BYJU’S Alpha is facing a lawsuit over control of the company. The edtech’s lenders argued that due to a default earlier this year, they have the right to appoint their representative, Timothy R Pohl, as the company’s head, according to Bloomberg.
However, BYJU’S has vehemently denied the allegations, calling them “bewildering.” In a statement, the edtech decacorn stated, “The litigants have made bewildering claims that BYJU’S ‘moved’ $500 million from BYJU’S Alpha, insinuating that these acts were somehow wrongful. This is entirely incorrect. We categorically deny these allegations.”
BYJU’S maintains that the transfers were fully compliant with the terms of the parties’ credit agreement and the agreed-upon rights and responsibilities. The company emphasized that even the lenders have not alleged that the transfer was unauthorized under the existing contractual arrangement.
The dispute between the two parties emerged earlier this year. During the hearing, Brock Czeschin, one of Pohl’s lawyers, reportedly stated that a top manager at BYJU’S Alpha had admitted to transferring half a billion dollars out of the company.
It is important to note that the lenders are seeking control of BYJU’S Alpha, which serves as a holding company for the Term Loan B, according to Czeschin. The lenders are not attempting to take over BYJU’S itself, the edtech decacorn.
While the lenders claim a default occurred earlier this year, BYJU’S Alpha attorney Sheron Korpus stated in an interview that the company had met all debt payment obligations and any defaults should be considered technical breaches of the loan agreement.
BYJU’S also stated that it has fulfilled all its contractual payment obligations under the Term Loan B signed in 2021 and has not missed any payments. The edtech further asserted that no monetary defaults have occurred under the loan and dismissed the lenders’ allegations as insignificant technical and non-monetary defaults.
