The struggling edtech behemoth Byju’s addressed the National Company Law Tribunal (NCLT) with a request for a reasonable ruling, requesting to know within 48 hours whether the company can produce an undertaking as required by the bankruptcy court. As part of this endeavour, it is agreed not to pledge, sell, or transfer any of its assets. A disagreement with some investors, who have expressed worries about the company’s financial management and asset handling, is the root of the urgency. Byju’s is attempting to settle investor disagreements and stabilise its operations by asking the NCLT for clarification on handling the legal and financial challenges it is now facing.
Also read: NCLT Blocks Byju’s Share Sale – Investors Demand Answers
A senior lawyer for Byju, KG Raghavan, told the tribunal, “I don’t know what my client (Byju) wants to do, but I will obtain instructions from them on whether such an undertaking can be given.” After NCLT is informed of Byju’s decision to grant the undertaking, the matter will be heard on 9 July.
The attorney’s remarks came in response to a request made by the company’s lenders in the United States, who want to prevent the business from alienating its stock. Senior attorney Uday Holla, who represented the lenders, showed the court several documents and stated that Byju’s actions had not instilled trust in the court. However, according to Raghavan, the lenders contacted several forums to put more pressure on them.
Lenders applied on 29 May, claiming that founder Raveendran Byju borrowed Rs 350 crore in return for some of his shares, even after they submitted the plea in February. They said that if Byju’s kept taking out loans in exchange for shares, they would have someone to pursue and seize the money from because he was based in Dubai.
Lenders Claim Ten Insolvency Petitions against Byju’s Pending
The lenders stated that nearly ten insolvency petitions against Byju’s were pending before the Bengaluru bench of the NCLT and that the cases related to the company’s financial situation. Holla, who spoke on behalf of Glas Trust, a non-bank lending organisation with headquarters in the US, claimed that Byju’s parent company Think and Learn was guaranteed a $1.2-billion (Rs 8,000 crore) loan. The lenders had submitted an insolvency plea against Byju’s outstanding debts in February.
