Byju’s lenders seek to block payment to India cricket board
AMERICAN lenders are seeking to freeze the assets of a suspended director of the troubled Indian educational tech firm Byju’s, arguing his cash should be used to pay them, not debt owed to India’s governing board for cricket.
Glas Trust Company, the trustee for lenders owed US$1.2 billion, asked a United States bankruptcy judge to block Riju Ravindran, brother of Byju’s founder, from paying the cricket board more than US$19 million in order to clear an insolvency case in front of a judicial tribunal in India.
“Too often, Ravindran, who chose to serve as a director in Delaware, has improperly attempted to use his residence abroad to avoid accountability from the US courts,” lawyers for Glas said in a court filing on Thursday (Aug 1) night in Wilmington, Delaware.
The lenders are on the cusp of winning a judgment against Ravindran, who has been accused of helping hide US$533 million while he was a director of Byju’s unit incorporated in Delaware. US bankruptcy judge John Dorsey has already ruled against Ravindran on a number of issues and concluded that Byju’s manager was either “untruthful” or “the most incompetent officer or director of a company in Delaware’s history”.
Should the judge side with lenders, they could use the court order to demand that Ravindran’s banks freeze his funds. The lenders also want Dorsey to order the cricket board to refuse to accept the money.
A representative of Byju’s did not reply to a request for comment.
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Glas tried unsuccessfully to convince the National Company Law Appellate Tribunal in India to block Ravindran from paying off the cricket board. That prompted the court earlier this week to ask Ravidrant to reveal the source of the cash. Ravindran told the court on Thursday that the money was from the sale of various assets.
The appeals tribunal in India sided with Ravindran and on Friday quashed an insolvency order issued by a lower court.
Earlier this week, a judge in Delaware, where the main legal action against Byju’s is taking place, ordered Ravindran to pay US$10,000 a day until he helps locate the US$533 million.
Ravindran has been at the centre of a nearly two-year-old fight over the missing cash, which lenders say should be returned to them after the company defaulted. Ravindran hinted in court filings that the money was spent, but has failed to provide enough documentation to verify the claim.
He is one of three directors of Think & Learn – which operates the Byju’s brand – who were recently replaced by a trustee as part of the involuntary case filed in India, according to US court documents. Ravindran’s victory in the Indian court is likely to cause him and the other directors, including his brother Byju, to be reinstated, according to court documents.
The missing money is at the heart of a dispute between lenders owed US$1.2 billion and the startup founded by entrepreneur Byju Raveendran. The cash belongs to a bankrupt shell company, Byju’s Alpha, which is affiliated with Think & Learn and was taken over by the lenders after their loan defaulted. BLOOMBERG
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