Edtech giant BYJU'S has refuted claims that it is hiding $500 million through its US-based company, BYJU'S Alpha. Terming BYJU's Alpha as a non-operative US entity with no employees, the ed-tech company called the claims made in the Delaware court ‘bewildering’.
In a statement about the matter, the company said, “This is an interim order of a Delaware Court to maintain 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." the company added.
While BYJU'S has admitted to transferring the funds, it claims the fund transfer did not ‘contravene any Credit Agreement’.
“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 utilizing the raised funds to drive growth and expansion in its global operations and is free to transfer and use the funds as necessary." BYJU's added
BYJU'S further added that it has met all its contractual payment obligations agreed upon in Term Loan B which was signed in 2021 and has not missed even a single payment. It added that the allegations of a default by the lenders are 'merely insignificant technical and non-monetary defaults'.
The lawsuit has been filed by Glas Trust Company and investor Timothy R. Pohl against BYJU'S Alpha, its director, Riju Ravindran, and Tangible Play Inc. Both the companies being sued by the lenders are part of Byju Raveendran's Edtech empire.
According to Bloomberg, the allegation of hiding $500 million from lenders came out of a Delaware court hearing. BYJU'S Alpha is in a legal battle with its lenders over who should control the company.
The lenders claim that because BYJU'S defaulted earlier this year, they have the right to put their representative, Timothy R. Pohl, in charge.
During the court hearing on Thursday, BYJU'S Alpha claimed that the lenders were distressed debt investors who are trying to make a profit from the company's debt.