Bengaluru, May 19
BJYU’s has denied the allegations of lenders that its US entity, Byju’s Alpha, has hidden $500 million. The edtech major termed these allegations as “bewildering” and “entirely incorrect”.
The company said: “This is an interim order of a Delaware Court to maintain the status quo in relation to BYJU’S Alpha, a non-operative US entity set up to receive the Term Loan B, with no employees. 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.”
About the lawsuit
The referred lawsuit has been filed by Glas Trust Company and Timothy R Pohl against BYJU’S Alpha, Riju Ravindran (company director), and Tangible Play (Osmo). Both BYJU’S Alpha and Tangible Play are part of BYJU’S Group.
A Bloomberg report noted that BYJU’S Alpha and its lenders are engaged in a legal tussle over company control. Lenders have said that BYJU’S defaulted on the loan in 2023 and, thus, they have the right to put Timothy R Pohl (Glas Trust Company’s representative) in charge of the company.
The edtech company added that the money transfers were in full compliance with and did not contravene the terms of the parties’ credit agreement and the agreed-upon rights and responsibilities. “In fact, even lenders have not alleged that the transfer was not permitted under parties’ existing contractual arrangement. As BYJU’S Alpha is a non-operative entity, the funds were transferred to other operative entities for growth and expansion in its global operations. BYJU’S entered into the Term Loan B agreement with the clear intention of utilising the raised funds to drive growth and expansion in its global operations, and is free to transfer and use the funds as necessary,” the company spokesperson added.
Further, BYJU’S noted that it has fulfilled all its contractual payment obligations as agreed upon in the Term Loan B signed in 2021 and has not missed any payment thereunder.
“There have been no monetary defaults under the loan. The lenders’ allegations (which also we dispute) concern merely insignificant technical and non-monetary defaults,” the company added.
Further, the edtech company highlighted that this is a temporary order and the Court has not made any final determination against BYJU’S Alpha, including in relation to the transfer. “In the face of unrealistic and unacceptable terms being demanded by a collective of lenders engaged primarily in opportunistic trades, we remain steadfast in our pursuit of a fair and equitable resolution through good-faith negotiations. Our unwavering commitment to meeting all our financial obligations is demonstrated by our impeccable track record of consistently honouring timely payments,” said a company spokesperson.