Byju’s US firm Alpha accused of hiding $ 500 million from lenders in Delaware court in the US
ByJu’s US firm Alpha, one of its subsidiaries has been accused of concealing $500 million (approximately Rs 4,134 crores) by its lenders. According to the report by Bloomberg, a representative acting on behalf of lenders has sued the US firm Alpha, Tangible Play Inc., and Riju Ravindran in the Delaware court in the US for the recovery of a $ 1.2 billion loan. This case is known by the name of Glas Trust Company Vs Riju Ravindran, 2023-0488, Delaware Chancery Court(Wilmington).
During a court hearing on Thursday in Delaware, lenders made allegations of ByJu’s Alpha for hiding $500 million as a part of a fight between creditors and ByJu’s Alpha. Lenders clarified their stance over who should take control of the company by mentioning that because of a default earlier this year, they have the right to put their representative, Timothy R. Pohl, in charge.
In response to these allegations, 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.
Bloomberg reported that the company during ongoing legal proceedings not only admitted to transferring $ 500 million out of the company but also mentioned that this step was taken to safeguard the funds from predatory lenders. The company said during proceedings that it’s expecting a substantial capital infusion in the next two weeks which will help them to repay the $1.2 billion (roughly Rs. 99,274 crores) owed to the creditors.
