Byju’s Ordered to Halt Share Sales Amid Loan Breach Allegations

Byju's Ordered to Halt Share Sales Amid Loan Breach Allegations/Bloomberg

VoM News Desk | April 5, 2024 | 06:06 PM IST | Breaking News | Follow on Google News

Byju’s Ordered to Halt Share Sales Amid Loan Breach Allegations

Byju’s Ordered to Halt Share Sales Amid Loan Breach Allegations

An arbitrator has instructed Byju’s not to sell shares of a group firm after allegedly breaching terms of loans worth $42 million, Reuters reported, citing a confidential order.

Challenges Facing Byju’s

The edtech giant, once valued at $22 billion, has faced a significant devaluation amidst allegations of mismanagement, exits by auditors, regulatory investigations, and investor allegations. Byju’s refutes any wrongdoing but is now valued at approximately $250 million, marking a 99% decrease from its peak.

Details of the Dispute

MEMG Family Office, led by Ranjan Pai, initiated arbitration against Byju’s for purportedly failing to repay a loan via pre-agreed share transfer of Aakash Education company. An arbitrator has barred Byju’s from disposing of 4 million Aakash Education shares, amounting to a 6% stake, per the loan agreement.

Resolution Efforts and Challenges

Byju’s, yet to comment on the order, is reportedly in discussions with MEMG to resolve the issue. Byju’s cited difficulties in obtaining necessary approvals from investors for the share transfer during arbitration. Internal memos also highlight financial constraints due to legal disputes, including a Chapter 11 bankruptcy filing by a US unit listing liabilities of $1 billion to $10 billion.

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