A Delaware court in the US has denied a request by Term Loan B lenders of edtech company Byju’s to investigate the matter of $500 million transfer from the company’s US-based subsidiary Byju’s Alpha to other entities, according to a PTI report citing sources.
As per the report, Byju’s had denied allegations leveled by its $1.2 billion Term Loan B lenders, saying it has never defaulted on the payments. TLB Lenders including Redwood had filed suit against Byju’s US-based subsidiary for transfering $500 million from Byju’s Alpha.
Judge Morgan Zurn reportedly said that lenders had “no basis to further investigate the transfer.”
Earlier this month, Byju’s filed a complaint with the New York Supreme Court to challenge acceleration of the $1.2 billion TLB and to disqualify lender Redwood for its predatory practice. As per Byju’s, the TLB lenders (unsuccessfully) attempted to deprive Byju’s of its contractual right to ‘disqualify’ lenders engaged primarily in opportunistic trades.
Entrackr has reached out to Byju’s for further comment.
The decision comes as a sigh of relief for the Byju Raveendran-led company as it has been going through a series of havoc whether it’s dealing with loan default, financial investigating agency, mass layoffs, resignation of board of directors, or moving out of statutory auditors due to delay in regulatory filings.
Last week, three board members at Byju’s –GV Ravishankar from Peak XV Partners, Russell Dreidenstock from Prosus, and Vivian Wu- Chan Zuckerberg Initiative resigned due to differences with the management of the Bengaluru-based edtech firm.
Meanwhile, Deloitte resigned as auditor from the edtech unicorn and its affiliate company Aakash Educational Services. However, Byju’s has appointed BDO (MSKA & Associates) as its statutory auditors for the year commencing from FY22 for the next five years.
