Embattled edtech major Byju’s US lenders have urged the National Company Law Tribunal (NCLT) to restrain the company from pledging, selling or transferring its shares.
The US-based non-bank loan agency Glas Trust Company LLC have filed an insolvency plea.
At the tribunal, the lenders said that Byju’s was borrowing more money and alienating its shares in exchange, thereby causing ‘grave prejudice to them.’ The lenders argued that even after they filed the plea in February, promoter Raveendran Byju borrowed ₹350 crore in exchange for some of his shares.
The lenders added that since Byju was based in Dubai, they would be left with no one to prosecute and recover the money from if he continued borrowing money in exchange for shares.
The lenders urged the NCLT to pass an immediate stay order to protect their interests, stating that the company’s financial
Byju’s countered the request by saying, it needed time to file a response to the plea. The next hearing is on June 10.
Glas Trust represents over 100 lenders who loaned money to Byju’s’ US entity, Byju’s Alpha Inc, which is undergoing a voluntary bankruptcy process in a Delaware court.
This comes at a time when the edtech major Byju’s has announced that its parent company, Think & Learn Private Limited (TLPL), and two advisory board members - Rajnish Kumar and Mohandas Pai - have mutually decided not to renew the contractual agreement scheduled to end on June 30, 2024.
At least seven vendors have sued Byju’s at NCLT to recover their dues. The edtech company is fighting an oppression and mismanagement plea filed by its investors in the NCLT.
Board of Control for Cricket in India (BCCI) filed the first insolvency plea against Byju’s in November 2023. The cricket board claimed that the company had defaulted on a payment of ₹158 crore. The plea is at an advanced stage of hearing at the NCLT.