In a dramatic turn in the ongoing financial turmoil surrounding the Indian educational tech giant Byju’s, American lenders are moving to prevent a substantial payment to the Board of Control for Cricket in India (BCCI). The lenders, who are owed $1.2 billion, are demanding that Riju Ravindran, a suspended director of Byju’s and brother of the company’s founder, prioritize repaying them before settling a $19 million debt with the BCCI.
GLAS Trust Company, representing the creditors, has asked a U.S. bankruptcy judge to freeze Ravindran’s assets and block him from making the payment to the cricket board. This action is part of a larger effort to recover approximately $533 million that Ravindran is accused of concealing during his tenure as a director of Byju’s subsidiary based in Delaware.
In recent court filings, GLAS attorneys have criticized Ravindran for allegedly using his international residence to evade U.S. legal responsibilities. The legal battle has intensified as U.S. Bankruptcy Judge John Dorsey has already ruled against Ravindran on several fronts, criticizing him as either “untruthful” or “the most incompetent officer or director of a company in Delaware’s history.”
Should the court side with the lenders, they would gain the authority to demand that Ravindran’s banks freeze his funds and instruct the BCCI to reject the payment. The dispute highlights the complexities of international insolvency and corporate governance, with implications for Byju’s ongoing struggle to address its financial challenges.
Earlier this week, the National Company Law Appellate Tribunal in India ruled against a move to block the payment to the cricket board, prompting the Indian court to request Ravindran to disclose the source of the funds used for the payment. Ravindran claimed the money came from asset sales but has yet to provide sufficient documentation.
The ongoing legal saga underscores the broader financial difficulties facing Byju, which has been grappling with defaulted loans and internal disputes. Recent developments in the U.S. bankruptcy case have included a daily fine of $10,000 imposed on Ravindran until he assists in locating the missing funds.
As the legal battles continue, the outcome could significantly impact Byju’s financial restructuring and its relations with creditors and international partners. The case remains under the jurisdiction of the U.S. Bankruptcy Court in Delaware, where the complex web of financial and legal issues is being meticulously untangled.
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