Dispelling Charges of Fund Misappropriation
Amidst allegations of siphoning off funds, BYJU’S, a prominent edtech firm, addresses concerns regarding the disputed $1.2 billion Term Loan B (TLB). The company asserts that the funds in question are securely held by its non-US subsidiary. Here’s a detailed breakdown of the situation:
Transfer to Non-US Subsidiary: Camshaft Disclosure
Fund manager Camshaft, appointed by BYJU’S to oversee the TLB fund, confirms that the proceeds from the loan have been transferred to a wholly-owned non-US subsidiary of BYJU’S. The disclosure was made to the Delaware bankruptcy court, affirming the legitimacy of the fund’s location.
Contested Allegations: BYJU’S Response
BYJU’S contests allegations made by TLB lenders, asserting that no funds were siphoned off. The company emphasizes that its group entities remain the rightful beneficiaries of the funds, debunking any insinuation of financial impropriety.
Fund Movement: From Alpha to Inspilearn
In early 2023, funds initially held by BYJU’S Alpha were transferred to Inspilearn, another US-based subsidiary. From there, the funds were eventually moved to a non-US entity, in accordance with legal advice and regulatory compliance.
Loan Agreement and Defaults
BYJU’S clarifies that the loan agreement contains no restrictions on fund usage, except for regulatory limitations preventing repatriation to India. Despite never defaulting on interest payments, the company faces challenges due to accelerated loan terms by lenders, based on contested ‘events of default’.
Legal Battles and Insolvency Petition
BYJU’S is embroiled in legal battles contesting the validity of loan acceleration. Lenders are leveraging discovery tools to ascertain BYJU’S assets, including any US-held cash. Furthermore, a majority of TLB lenders have filed an insolvency petition with the NCLT Bangalore, a move vehemently opposed by BYJU’S as premature and baseless.
Conclusion: Upholding Transparency Amidst Legal Wrangles
BYJU’S remains committed to transparency and legal compliance amidst ongoing legal disputes. The company’s assertions regarding the TLB funds aim to dispel any doubts regarding financial integrity. As legal proceedings unfold, BYJU’S is poised to defend its position and emerge stronger from these challenges.
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