New Delhi, March 5 (SocialNews.XYZ) Embattled edtech company Byju’s on Tuesday said that no funds have been siphoned off and around $533 million are currently in a 100 per cent non-US subsidiary of the company.
US-based hedge fund manager Camshaft Capital is no longer managing the funds which are part of $1.2 billion Term Loan B (TLB), the company said in a statement.
Camshaft has disclosed in court filings that $533 million it managed for Byju’s Alpha, a US unit of Byju’s, was transferred to another 100 per cent and US-based subsidiary of Byju’s.
Byju’s had taken a loan from certain US-based lenders in November 2021. For that purpose, a special purpose vehicle (SPV) named Byju’s Alpha was incorporated in Delaware.
“Byju’s Alpha was never an operating company. Its sole role was to receive the funds and then disburse them through the group. Under the loan agreement, there is no restriction on the use of funds, except that for regulatory reasons the funds cannot be brought to India,” the edtech company argued.
Byju’s alleged that “in an attempt to extract better and unbargained-for terms, the lenders accelerated the loan in March 2023”.
The company further alleged that the lenders relied on concocted non-monetary “events of default”, such as the failure of one of Byju’s Indian subsidiaries, Whitehat, to accede to the loan agreement as an additional guarantor.
“That is the case even though it had become legally impossible for Whitehat to provide the additional guarantee due to amendments to certain RBI regulations that came into effect in August 2022”.
This is currently contested in the New York Supreme Court and the Delaware Supreme Court.
In the meantime, “lenders took control over Byju’s Alpha by purporting to replace Byju’s nominee with their own designee,” alleged the Byju Raveendran-run company which is yet to pay salaries of its more than 20,000 employees for the month of February.
In early 2023, the funds were transferred from Byju’s Alpha to Inspilearn, another US based fully owned subsidiary of the company.
Inspilearn, thereafter, transferred those funds from Camshaft to a non-US based fund.
“More recently, and on receipt of advice from counsel, those funds have been transferred from Inspilearn to a non-US based 100 per cent subsidiary of Byju’s,” said the company.
Source: IANS
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