New Delhi:

Embattled edtech firm Byju’s did not siphon off funds or manipulated accounts, a year-long investigation by the government has found. However, the company did go through lapses in its corporate governance structure, the government added.

The probe by the Ministry of Corporate Affairs (MCA) concluded allegations regarding the manipulation of accounts and siphoning of funds against Byju’s “to be unsustainable” and as such are not recommended to be referred to the Serious Fraud Investigation Office (SFIO), according to people aware of the matter.

The MCA inspection was conducted after complaints were filed by the National Commission for Protection of Child Rights (NCPCR) and the Registrar of Companies (ROC).

These complaints revolved around accusations that Byju’s arm twists its customers for continuing with its products or services, and doesn’t issue refunds to those requesting it, among others.

According to people close to the matter, the report, yet to be made public, found that it is possible that the promoters and directors of Byju’s could have been more transparent with their actions.

However, the MCA report observed that most of the corporate governance issues which were alleged by the directors were in relation to “transparency and independence”.

It was also observed that the Nominee Directors had resigned during the year 2023-24, citing “corporate governance issues, including lack of deliberations with them on the important financial and business policies”.

The report also concluded that Bujy’s has been taking all steps to resolve complaints and grievances pursuant to which many complaints stand resolved and the remaining are under the resolution process.

As of January 31, Byju’s paid customer base had 7.5 million students.

Of the 4,390 complaints made to the edtech company, 2,856 have been resolved and the pending complaints formed 0.02 per cent of the total paid customer base.

There is also “no issue with the change in the accounting policy for revenue recognition,” the report found.

The company used Rs 9,025 crore from 2014 to 2022 for M&A and these acquisitions returned an income of Rs 4,287 crore.

Byju’s is currently involved in multiple cases in courts as well as in the National Company Law Tribunal (NCLT).

The edtech company is trying to raise $200 million in a rights issue but has been restrained from utilising any funds by the NCLT.

Byju’s is also exploring out-of-court settlements with some of its creditors.

Once valued at $22 billion, the edtech company is now worth zero.

Global investment giant Prosus wrote off the value of its shareholding in Byju’s, recording a loss of $493 million in its annual report for FY24.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

A director of Indian tech firm Think & Learn Pvt faces financial penalties for defying a US judge’s order to find out where the troubled company stashed $533 million that jilted lenders say should go to them.

Riju Ravindran, the brother of company founder Byju Raveendran, not only failed to make a serious effort to find out what happened to the cash, but deceived the court, US Bankruptcy Judge John Dorsey said during a hearing Tuesday in Wilmington, Delaware.

“I conclude Mr. Ravindran’s testimony is not truthful,” Dorsey said. Ravindran either knows where the money is being hidden and won’t say, or he refused to find out, Dorsey said. 

The decision was a symbolic victory for lenders, represented by their agent, Glas Trust, and likely puts only limited pressure on Ravindran to cooperate in order to avoid financial penalties. Dorsey said he would hold a hearing to decide how much Ravindran must pay in fines and whether the businessman has any assets subject to court jurisdiction.

Ravindran, his brother and his sister-in-law are the only directors of Think & Learn, which operates under the name Byju’s, according to court testimony. Dorsey has repeatedly expressed frustration over the company’s refusal to say where the money is being held. Earlier this year the judge ordered the arrest of a hedge fund manager who helped Ravindran move the cash. That manager refused a court order to reveal what happened to the money, Dorsey found. 

Dorsey declined to issue an arrest warrant for the Ravindran, who is an Indian citizen currently living in Dubai, a city in the United Arab Emirates, which does not have an extradition treaty with the US. 

A representative for Think & Learn did not immediately respond to a request for comment. During the hearing, Ravindran’s attorney, Sheron Korpus argued that his client did everything he could to find the money, but that his brother, Byju Raveendran and Byju’s wife claimed they didn’t know. 

“Everybody has their own family dynamic,” Korpus told the judge.

The missing money is at the heart of a fight between lenders owed more than $1.2 billion and Think & Learn. The two sides are battling in courts in Delaware and New York. Lenders had previously seized control of a holding company set up by Think & Learn to issue $1.2 billion in debt. That unit, Byju’s Alpha, is now in bankruptcy under Dorsey’s oversight. Ravindran is appealing a decision by Delaware’s Chancery Court approving that seizure.

The US bankruptcy case is BYJU’s Alpha Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington).

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

A Byju’s logo is seen in this illustration taken, June 22, 2023.
| Photo Credit: Reuters

Byju Raveendran, the founder of the edtech company Think and Learn, which owns the Byju’s brand, will handle the firm’s day-to-day operations following the resignation of CEO Arjun Mohan, the company said on April 15.

The company has also announced a major rejig of the business that will consolidate its business into three focused divisions – the learning App, online classes and tuition centres, and test-prep.

“The changes follow an extensive seven-month operational review and cost optimisation exercise led by outgoing BYJU’S India CEO Arjun Mohan. This new phase will also see Byju Raveendran taking a more hands-on approach in spearheading the daily operations of the company,” the company said.

Mr. Mohan will now transition to an external advisory role, lending his expertise to the company during this transformation phase.

Over the past four years, Mr. Raveendran focused primarily on strategic aspects such as raising capital and driving global expansion.

“With this new organisational structure and with the return of Byju Raveendran as the operational leader, BYJU’S is now well-positioned to begin its next chapter of innovation-led growth by launching at scale its new suite of AI-first products that have already received an overwhelmingly positive feedback in the pilot phase,” the statement said.

Photo used for representation purpose only.
| Photo Credit: Reuters

Edtech firm Think and Learn, owner of Byju’s brand, has started paying March salaries to its employees after a delay of nine days and the payout process is expected to complete in next 10 days, according to sources.

The company in a communication to employees blamed the group of four investors for the delay.

“We are pleased to inform you that salary disbursement has commenced today and will be completed over the next 10 days. Unfortunately, despite our efforts, we haven’t yet secured approval to access the rights issue funds, because of the action of four foreign investors. However, we have arranged an alternative line of credit to ensure timely payments,” Byju’s said in an email to employees.

The company raised $200 million through rights issue to meet its operational requirements, including expenses related to employees’ salaries.

A group of four investors — Prosus, General Atlantic, Sofina, and Peak XV — along with the support from other shareholders, including Tiger and Owl Ventures, have approached NCLT against the founders as well as the rights issue which may lead to change in shareholding pattern in the company.

Sources said that 25% employees in the lower pay scale will get full payment while senior employees will get partial payment.

“We sincerely appreciate your patience and understanding throughout this period,” Byju’s said in the email.

New Delhi:

Byju’s is laying off about 500 employees, including from sales, amid a financial crunch, sources said, even as the troubled edtech firm maintained that it is in the final stages of business restructuring to streamline operations.

The layoff in the embattled edtech company began 15-20 days ago, sources said, adding that it would impact 500 employees.

They, however, pointed out that the edtech player might not have to resort to further rationalisation, except in the ‘worst case scenario’.

The latest round of job cuts will impact sales functions, teachers and some tuition centres.

There was no official word from Byju’s, which has been embroiled in a legal dispute with some of its investors, with regard to the layoffs.

Few staff members were purportedly communicated about the development over the phone.

When contacted, Byju’s spokesperson, in an email response, said, “We are in the final stages of a business restructuring exercise announced in October 2023 to simplify operating structures, reduce the cost base, and better cash flow management”.

“As you are also aware, we are going through an extraordinary situation in the company because of the ongoing litigation with four foreign investors, where every employee and the ecosystem is going through tremendous stress, given the present circumstances,” the spokesperson said.

Byju’s said that it regrets the “unfortunate situation” the company has been forced into.

“Still, it is something that we will put behind us soon with majority investor support for the USD 200 million rights issue. We request everyone’s understanding of the individual and collective stress on the system, which might be prompting some unforeseen situations for the departing employees,” Byju’s spokesperson said.

Byju’s had earlier indicated that the business rehaul exercise would impact nearly 4,500 people, and subsequently in October and November of 2023, as many as 2,500-3,000 people were laid off.

Considering that nearly 3,000-3,500 people have been affected by layoffs so far, it still leaves the possibility for further retrenchment of 1,000-1,500 people.

Byju’s recently informed its employees that there will be a delay in the disbursement of March salaries.

The management in a communication to employees had blamed the situation on an interim order obtained by “a few misguided foreign investors” in late February, which “restricted usage of the funds raised through the successful rights issue”.

Byju’s had also sought to assure staff that it is following a parallel line of credit to ensure that employees get their salaries by April 8.

A clutch of investors of Byju’s had filed an oppression and mismanagement suit against the company management before the National Company Law Tribunal (NCLT), seeking to oust the founders, including CEO Byju Raveendran, and appoint a new board.

Earlier, the National Company Law Tribunal (NCLT), Bengaluru Bench declined to grant a stay on the extraordinary general meeting (EGM) called by ‘Think and Learn’, owner of the Byju’s brand, on March 29. The EGM was called to hike the authorised share capital of the embattled edtech firm, following the recent USD 200 million rights issue.

The company had closed the USD 200 million rights issue in February at a 99 per cent lower valuation compared to its peak enterprise value of USD 22 billion.

The once-storied edtech startup, Byju’s rose to dizzying heights before facing a slew of challenges.

While the return of students to physical classes post-pandemic and the recent acquisition of Aakash put Byju’s under a financial strain, the edtech firm in the last one year suffered other setbacks too, including its auditor resigning, lenders beginning bankruptcy proceedings against a holding company and a US lawsuit disputing the terms and repayment of a loan.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

Embattled edtech company Byju’s has informed its employees that there will “again” be a delay in disbursement of salaries.

Byju’s management in a communication to employees blamed the situation on an interim order obtained by “a few misguided foreign investors” in late February which “restricted usage of the funds raised through the successful rights issue”.

Byju’s also sought to assure staff that it is following a parallel line of credit to ensure that employees get their salaries by April 8.

“We are writing to you today with a heavy heart but with a message of hope and reassurance. We regret to inform you that there will again be a delay in the disbursement of salaries. A few misguided foreign investors in BYJU’S have obtained an interim order in late February which has restricted usage of the funds raised through the successful rights issue,” the management wrote.

The note further said: “This irresponsible action by the four foreign investors has compelled us to temporarily hold the disbursal of salaries until the restriction is lifted.” Byju’s said it has full faith in the Indian judicial system and eagerly awaits a favourable outcome that will enable it to utilise the funds raised through the rights issue and alleviate the financial challenges it is currently facing.

“As you know, the founders have put everything back into the company, and regardless of the court verdict, we are following a parallel line of credit to ensure that you receive your salary by 8th of April,” the management said.

On a positive note, the management said, it has the necessary vote to increase the authorised capital for the rights issue.

“It means that once the restrictions on using the raised funds are lifted, we can meet all our salary commitments immediately. As you might have read, our founder, Byju Raveendran, has once again appealed to disgruntled investors in a collaborative spirit, and we are hoping that litigating investors would have a reasonable spirit in not frustrating our daily lives any longer,” it said.

The company said it understood the feelings of helplessness that may arise due to these circumstances, and added “we share your frustration”.

“However, we urge you to hold onto hope and remain resilient. BYJU’S has overcome challenges recently, and we firmly believe that together, we will overcome this last hurdle. We are confident that justice will prevail and the financial constraints will be resolved soon,” the management wrote thanking employees for their patience, understanding, and continued dedication during the difficult time.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

Edtech firm Byju’s has asked its14,000 employees to work from home as it vacated all its offices except the headquarters in Bengaluru amid the ongoing crisis. 

Sources told the NDTV Profit that except for IBC Knowledge Park in Bengaluru – where over 1,000 employees work – all other office premises across the country have been vacated by the edtech giant.

The process has been going on for the past few months as the company did not renew several of its contracts for offices across cities as a way to cut costs, the NDTV Profit reported.

However, around 300 of Byju’s tuition centres, which are physical spaces where students of classes 6-10 study, will continue functioning, the report said.

Byju’s has been struggling with cash-flow problems and is embroiled in a dispute with creditors over a $1.2 billion loan. Once valued at more than $20 billion, Byju’s has seen its valuation crash by an estimated 90 percent over the past year.

Byju’s major stakeholders last month voted to remove Byju Raveendran from his role as chief executive officer (CEO) and stripping him of his

The move was rejected by Byju’s, which said the resolution was passed at a meeting attended only by a “small cohort of select shareholders”. “Byju’s firmly declares that the resolutions passed during the recently concluded extraordinary general meeting… are invalid and ineffective,” the company said in a statement.

Byju Raveendran has lost the support of key investors after a series of crises, including the resignation of auditor Deloitte over corporate governance issues and the legal fight with the US lenders. Mr Raveendran last month had written to the staff, saying that the firm was unable to process the February salaries as its funding remained blocked by the investors.

New Delhi:

Edtech firm Byju’s parent company, Think & Learn Pvt, has found itself embroiled in a complex web of financial mismanagement, offshore dealings, and legal disputes. At the centre of it is $533 million, a Florida hedge fund, a bankrupt shell company and Byju’s beleaguered founder, Byju Raveendran. 

Byju’s major stakeholders last month voted to remove Mr Raveendran from his role as chief executive officer and stripping him of his position on the board of the company he established back in 2015. Byju’s, once hailed as one of India’s most profitable start-ups with a valuation exceeding $20 billion, has witnessed a staggering decline of approximately 90 per cent in the past year.

The Florida Link

The story begins with a small Florida hedge fund, Camshaft Capital Fund, accused of assisting Think & Learn in concealing $533 million. This staggering amount, crucial to the ongoing financial tussle, was initially held by Byju’s Alpha Inc., a bankrupt shell company affiliated with Think & Learn. Lenders, owed $1.2 billion, took control of Byju’s Alpha after it defaulted on its loan. The $533 million, allegedly transferred to Camshaft Capital Fund, was subsequently moved to an undisclosed offshore trust by Raveendran’s brother, Riju Ravindran.

Last month, Alpha had filed for bankruptcy protection over the $1.2 billion loan default.

The lenders, seeking repayment of the $1.2 billion and the elusive $533 million, have been locked in a legal struggle with Byju’s. A court ruling in the US state of Delaware gave lenders control of Alpha, a decision now under appeal by Riju Ravindran. A US court on Friday dismissed Camshaft Capital Fund’s attempt to avoid disclosing details about the cash. 

Byju’s lawyer, Benjamin Finestone, revealed during the hearing that the $533 million was initially transferred to Camshaft Capital Fund before being moved to an unnamed offshore trust. 

Potential Sanctions

Camshaft Capital Fund has resisted disclosing information about the money, citing its “duty” to protect clients and redirecting inquiries to a Delaware company called Inspilearn, a Delaware company that allegedly received the money from Camshaft before its transfer to the unnamed trust.

However, a US judge labelled Camshaft’s reluctance as a “huge red flag.” Failure to comply with the court’s order could lead to sanctions, as the judge threatened a “show cause” hearing on Monday if the information is not provided.

Series Of Setbacks

Byju’s, once valued at $22 billion in 2022, has faced a tumultuous period since early 2023. Auditor resignations, lenders initiating bankruptcy proceedings, and a US lawsuit challenging loan terms have contributed to the company’s downfall.

Byju’s is also grappling with financial challenges that extend beyond courtrooms. Mr Raveendran informed employees recently that the company is unable to process salaries due to a legal dispute with investors, reported news agency Reuters. 

Byju’s started its venture in 2006 by offering classes for MBA aspirants preparing for the CAT exam. Over the years, the edtech firm diversified its offerings, extending its reach from postgraduate to undergraduate and eventually school students. In 2015, it launched Byju’s learning app, setting the stage for the company to become India’s first ed-tech unicorn in just four years.

New Delhi:

Crisis-hit edtech star Byju’s has contested Friday’s decision of its shareholders to oust its founder as the chief executive officer. The company said the resolutions taken at the shareholders’ meeting were “invalid” since its founders were not present.

“The resolutions passed during the recently concluded extraordinary general meeting – attended by a small cohort of select shareholders – are invalid and ineffective,” Byju’s said.

The company said at least one founder-director must attend the meeting to form a valid quorum, but it was not met since neither Byju Raveendran, his wife nor his brother were present. This renders the resolutions taken at the meeting as “null and void,” said a statement.

Prosus NV and Peak XV Partners were among the shareholders who voted yesterday to dethrone Byju Raveendran, indicating displeasure with the entrepreneur as his company fights to remain in business.

The outcome, however, will not be applicable until March 13 when the Karnataka High Court hears Mr Raveendran’s challenge to the validity of the meeting. The shareholders too are expected to present their decisions before the court to justify their position.

Several staff tried to crash the meeting on a Zoom call involving the investors and the management, reported Bloomberg citing people with knowledge about the matter. There were loud noises and whistles by unknown participants during the meeting, it said.

Byju’s was once a high-flying online tutoring startup valued at $22 billion in 2022. Its valuation has nosedived 90% since and the company has cut thousands of jobs to survive.

In a series of setbacks, the company recently saw its auditor Deloitte resigning and a lawsuit in the US disputing loan payment terms. It also faces an Enforcement Directorate probe in connection with alleged Foreign Exchange Management Act (FEMA) violations.

A file photo of Byju’s logo
| Photo Credit: Reuters

Edtech major BYJU’S top official said the company’s $200 million rights issue has been fully subscribed and asked all shareholders to participate in the “renewed mission”.

Think and Learn Private Limited, which operates under BYJU’S brand name, has floated $200 million rights issue at less than 99% enterprise valuation compared to its peak valuation of $22 billion.

“Our rights issue is fully subscribed and my gratitude to my shareholders remains strong. But my benchmark of success is the participation of all shareholders in the rights issue. We have built this company together and I want us all to participate in this renewed mission,” BYJU’S Founder and CEO Byju Raveendran said in a letter to shareholders.

Mr. Raveendran said that the company will appoint a third-party agency to monitor the usage of funds raised through the rights issue. “The ownership of the company does not change pre and post a rights issue, so the question of valuation itself is irrelevant as value preservation is maintained,” he said.

The comment assumes significance as a group of shareholders, who jointly hold around 30% stake in BYJU’S, have called for an extraordinary general meeting (EGM) to oust top management alleging several anomalies under their leadership.

“A few vested interests are misrepresenting our relationship as adversarial. Let me be unequivocal in stating that such narratives could not be further from the truth. There is nothing to be gained from conflict, especially with those who share our commitment and conviction towards our common cause,” he said.

He said that he will not allow “self-serving actions of a few individuals” cloud his judgment and pollute the relationship among shareholders.

BYJU’S CEO has offered to restructure the Board and appoint two non-executive directors to the Board by the mutual consent of the founder and shareholders after the audit of financial year 2023 is complete by March-end.