Lenders accused one of India’s hottest tech companies, Byju’s Alpha, of hiding $500 million as part of a fight between creditors and the self-proclaimed biggest education technology company in the world. The allegation came out at a court hearing on Thursday, May 19, in Delaware, where Byju’s Alpha faces a lawsuit over who should control the company. Lenders claim that because of a default earlier this year, they have the right to put their representative, Timothy R. Pohl, in charge.
The dispute is the latest setback for the high-flying startup founded by Byju Raveendran. Byju’s had already been working to appease creditors trying to restructure a $1.2 billion term loan when government investigators searched company offices in April. The Bengaluru-based company has been working toward an initial public offering of its tutoring unit for several years.
Earlier this year, as the two sides were in a standoff, a top manager at Byju’s Alpha “admitted to transferring half a billion dollars out of the company,” Brock Czeschin, one of Pohl’s lawyers, said during the hearing, which was held by telephone.
Byju’s Alpha was trying to protect the money from predatory lenders, Joe Cicero, a lawyer for Byju’s Alpha, said during the hearing. The company had a right to transfer the money under the loan agreement, he said.
The company is current on all debt payments and any defaults should be considered technical breaches of the loan agreement, Byju’s Alpha attorney Sheron Korpus said in an interview.