The woes for Byju's continue with the National Company Law Tribunal (NCLT) issuing a notice to the beleaguered ed-tech firm on Wednesday, February 28, in response to a plea filed by the Glas Trust Company LLC to initiate the insolvency resolution procedure. The tribunal has directed Byju's to file its response to the plea and listed the case for hearing in April 2024.
The US-based Glas Trust represents over 100 lenders who had loaned money to Byju's' US entity, Byju's Alpha Inc, which is currently facing a voluntary bankruptcy process at a Delaware court. The Indian entity of Byju's had a standing guarantee to the $1.2-billion loan, or ₹8,000 crore, but when the lenders invoked the guarantee and asked it to pay up the money, the company neither responded to the notices nor paid any money.
This is the fourth insolvency plea filed against the company in less than six months. The plea was reportedly filed on January 22 and it was registered in the NCLT on February 21.
Earlier, investors have made startling allegations against the edtech behemoth, accusing it of diverting a staggering $533 million to an obscure hedge fund in the United States. The NCLT was approached by four shareholders who sought to halt a $200 million rights issue, denouncing it as illegal and in violation of established laws.
Byju’s in news—A timeline of recent events
February 26: The corporate affairs ministry asks its field officers to expedite the inspection of the books of Byju's and submit the report.
February 23: Shareholders of Byju's voted unanimously to remove Founder CEO Byju Raveendran and his family members from the board over alleged "mismanagement and failures" at what was once India's hottest tech startup. However, the company had called the voting done in the absence of founders as invalid and ineffective.
February 22: The Enforcement Directorate upgraded its Look Out Circular (LC) issued against founder and CEO Byju Raveendran in connection with a FEMA probe, seeking to stop him from going abroad. The earlier alert meant that immigration authorities had to just intimate the agency about his movements through various ports.
February 21: Founder and CEO Byju Raveendran said the company's $200 million rights issue has been fully subscribed and asked all shareholders to participate in the "renewed mission". Think and Learn Private Ltd, which operates under Byju's brand name, has floated a $200 million rights issue at less than 99% enterprise valuation compared to its peak valuation of $22 billion.
(Edited by : Amrita)
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