US Judge dismisses Byju’s US lender GLAS Trust's plea to block edtech firm's payment to BCCI: Report

A US judge refused to block a debt payment designed to free Byju’s from an insolvency case in India, telling American lenders to take their complaints about the transaction to a court in the home country of the educational tech firm, Bloomberg reported. 

US Bankruptcy Judge Brendan Shannon rejected a lender request to block Riju Ravindran, brother of Byju’s founder, from paying more than $19 million to India’s governing board for cricket, the report added.  

In some respite to Byju Raveendran, the National Company Law Appellate Tribunal (NCLAT) halted insolvency proceedings and approved a settlement between the Board of Control for Cricket in India (BCCI) and Byju’s (Think & Learn Pvt Ltd) earlier this month. 

NCLAT accepted the settlement between Byju’s and BCCI (operational creditor) after recording an undertaking that the repayment is being personally funded by Riju Raveendran (brother of Byju Raveendran) and not taken from money that should go to financial creditors. 

The development comes as a respite for the beleaguered edtech company, which has been plagued by boardroom exits, tussle with investors and a collapsing valuation.  

The settlement plan was opposed by GLAS Trust Company LLC, one of the US-based creditors of the edtech firm, which termed the repayment ‘tainted’ and being funded with ‘stolen money’.   

GLAS Trust Company, the trustee for lenders owed $1.2 billion, had argued that any money Ravindran uses to pay Byju’s debts should go to them instead. 

On August 1, Riju Raveendran and his senior advocate Puneet Bali appeared before the court, where he submitted an affidavit and an undertaking confirming his commitment to pay Rs 158 crore to BCCI. Riju explicitly stated to the court that the funds being transferred to BCCI are sourced from his personal finances, derived from the sale of Think and Learn’s shares over the period spanning from 2015 to 2022. 

The lenders are on the cusp of winning a judgment in a US court against Ravindran, who has been accused of helping hide $533 million while he was a director of a Byju’s unit incorporated in Delaware. US Bankruptcy Judge John Dorsey has already ruled against Ravindran on a number of issues and concluded the Byju’s manager was either “untruthful” or “the most incompetent officer or director of a company in Delaware’s history”, the Bloomberg report added.