Byju’s denies hiding $500 million through US-based subsidiary

NEW DELHI: Edtech major Byju’s on Friday strictly refuted allegations of hiding $500 million through its US-based subsidiary Byju’s Alpha terming such claims as ‘bewildering.’ Byju’s Alpha, the firm said is a non-operative US entity set up to receive the term loan B with no employees.

“This is entirely incorrect. The transfers were in full compliance of and did not contravene any terms of the parties’ credit agreement and the agreed-upon rights and responsibilities. In fact, even lenders have not alleged that the transfer was not permitted under parties’ existing contractual arrangement,” the startup said in a statement.

News agency Bloomberg which reported on the development said that the allegation by lenders came out at a court hearing in Delaware where Byju’s Alpha faces a lawsuit over who should control the company. Lenders, the report said, claim that because of a default earlier this year, they have the right to put their representative Timothy R. Pohl in charge. The lawsuit was filed by Glas Trust Company against Byju’s Alpha, its director Riju Ravindran and Tangible Play Inc. Riju Ravindran is the younger brother of Byju Raveendran. Accordingly to the report, a top manager at Byju’s Alpha admitted to transferring half a billion dollars out of the company.

As Byju’s Alpha is a non-operative entity, the funds were transferred to other operative entities for growth and expansion in its global operations, Byju’s said.

The company also said that it has fulfilled all its contractual payment obligations as agreed upon in the term loan B signed in 2021 and has not missed a single payment thereunder.

“The lenders’ allegations (which also we dispute) concern merely insignificant technical and non-monetary defaults. The order does not have any bearing on any other subsidiary of Byju’s anywhere in the world. Further, this is a temporary order and the court has not made any final determination against Byju’s Alpha including in relation to the transfer,” the firm said adding that the completion of a recent funding round of $250 million reinforces the company’s financial stability.

“Byju’s entered into the term loan B agreement with the clear intention of utilising the raised funds to drive growth and expansion in its global operations and is free to transfer and use the funds as necessary,” the company added.