At a time when BYJU’S has been making headlines for raising capital in India, the edtech giant’s US arm has come under the scanner as lenders accused it of hiding $500 million, stated a Bloomberg report on Friday.
The accusation, part of the legal tussle between creditors and BYJU’S, and came up at a court hearing over who should control BYJU’S Alpha.
BYJU’s, however, denied the allegation “This is entirely incorrect… this is an interim order of a Delaware Court to maintain status quo in relation to BYJU’S Alpha, a non-operative US entity set up to receive the Term Loan B, with no employees,” said the spokesperson at BYJU’S.
The litigants claimed that BYJU’S moved $500 million from BYJU’S Alpha. “The transfers were in full compliance of and did not contravene any terms of the parties’ Credit Agreement and the agreed-upon rights and responsibilities,” the person added.
BYJU’s made headlines last week when it closed $250 million in a fresh funding round from US-based fund manager Davidson Kempner Capital Management. The company is currently understood to be in the final stages of negotiations to close another $750 million by the end of the month.
The current dispute comes as a setback once again to BYJU’s which has of late been mired in controversy for more reasons than one.
Earlier this month, the Enforcement Directorate (ED) — India’s financial crime agency —carried out searches in three of BYJU’S offices in the Indian city of Bangalore, which allegedly revealed that its parent firm, Think & Learn Pvt Ltd, had received foreign direct investment of nearly Rs 28,000 crore between 2011 and 2023. The company remitted Rs 9,754 crore to various foreign jurisdictions between 2011 and 2023 in the name of overseas direct investments, the agency added.
Last month, private equity firm BlackRock, which holds a minority stake in BYJU’S, had marked down its valuation to $11.15 billion.
Earlier, Netherlands-based technology investor Prosus had written down the value of its existing 9.67% stake in the decacorn to a mere $578 million at the end of the September quarter, thereby pegging its valuation at about $5.9 billion.
BYJU’S was at the peak of its business in 2020 when demand for online edtech platforms spiralled during the pandemic. However, things changed drastically since the beginning of 2022 after schools reopened and students started moving back to the offline medium from online.
Despite being the most valued company in the Indian startup ecosystem, it is still making huge losses, which stood at ₹4,588 crore for the fiscal year ended March 31, 2021.
Earlier, the company has also come under the scanner for delaying the release of its audited financial accounts until September 2022. There have also been questions about its accounting practices and mass layoffs.