A US Judge refused to block a debt payment which could free troubled edtech major Byju’s from its insolvency case in India, Bloomberg reported, adding that the judge told American lenders to take their complaints about the transaction to an Indian court instead.
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What was the request from the lenders of Byju’s?
GLAS Trust Company, the trustee for lenders to which Byju’s owes $1.2 billion, requested the court to block Riju Raveendran, the brother of founder Byju Raveendran, from paying more than $19 million to the Board of Control for Cricket in India (BCCI), arguing that any money Raveendran uses to pay Byju’s debts should go to them instead.
Byju’s paying the BCCI would allow it to win dismissal of its insolvency case in India.
US Bankruptcy Judge Brendan Shannon rejected the request. “I am deeply concerned that I am being asked for relief that would frustrate proceedings in another country,” Bloomberg quoted Shannon as saying.
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Giving the lenders what they wanted “would be an unimaginable insult to the system in India,” Bloomberg quoted Sheron Korpus, a lawyer representing Raveendran as saying during the court hearing. The lenders were trying to keep alive, the bankruptcy case in India started by the cricket board, he added.
What were the accusations against Byju’s in the US?
Raveendran had been accused of helping to hide $533 million while he was a director of a Byju’s unit incorporated in Delaware.
He hinted in court filings that the money was already spent, but didn’t provide enough documents to verify this claim.
US Bankruptcy Judge John Dorsey ruled against him, concluding him as either “untruthful” or “the most incompetent officer or director of a company in Delaware’s history,” according to the report.
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GLAS had also tried to convince the National Company Law Appellate Tribunal (NCLAT) to block Raveendran from paying the BCCI. The NCLAT sided with Raveendran and quashed the order a lower court issued.