Indian edtech giant BYJU’s has clarified ownership of a disputed $533 million fund parked in a US subsidiary, days before a crucial court hearing. This statement comes amid ongoing financial challenges faced by the company, including locked funds raised through a rights issue and a separate dispute with investors.
Dispute Over Fund Location
- On March 3rd, 2024, BYJU’s issued a statement clarifying the location and ownership of the $533 million fund in response to a US court hearing scheduled for the following day.
- This statement contradicts earlier reports and claims by a group of investors who alleged that the funds had been “siphoned off.”
- BYJU’s maintains that the money remains in a subsidiary company, Inspilearn LLC, which is wholly owned by Think & Learn, a subsidiary of BYJU’s itself.
Recent Financial Struggles
- Just prior to their statement regarding the $533 million fund, BYJU’s had faced criticism for claiming they lacked funds to pay employee salaries.
- This claim was linked to a separate dispute with investors who had initiated legal proceedings, causing funds raised through a rights issue to be frozen.
- However, BYJU’s clarified that the $533 million, raised through a term loan (TLB), cannot be used for salaries due to restrictions on its usage within India.
BYJU’s Statement Highlights
- BYJU’s refutes accusations of “siphoning off” the $533 million fund, stating that it remains within a subsidiary company owned by the group.
- The company clarifies that the TLB funds were raised in 2021 for international operations and cannot be used for salaries due to contractual restrictions.
- BYJU’s criticizes “predatory bond traders” and certain shareholders for pursuing legal actions with “unfounded allegations” and attempts to gain control of the company.
Unresolved Issues and Potential Impact
- While BYJU’s has clarified their position on the $533 million fund, several issues remain unresolved, including the ongoing legal disputes with investors and the company’s financial situation.
- These issues raise concerns about the company’s financial stability and its ability to meet future obligations, potentially impacting its operations and growth prospects.
Conclusion
BYJU’s statement provides some clarification regarding the disputed $533 million fund. However, the company still faces significant challenges, including legal disputes and financial constraints. The company’s ability to navigate these issues and achieve financial stability will be crucial for its future success.
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