Byju’s, a popular Indian educational tech company, is facing more legal problems in the United States. The company’s content manager and a business ally are now under investigation for their involvement in taking money and valuable assets from businesses that Byju’s had bought in the US. These actions have led to the possibility of millions of dollars in fines.
Executives Accused of Taking Money and Assets
Byju’s has been struggling financially, and now its troubles are getting worse. A federal judge in the United States is considering whether to impose heavy financial penalties on two men connected to the company: Vinay Ravindra, the content manager, and Rajendran Vellapalath, a business ally who runs a Dubai-based company called Voizzit Technology.
The legal battle began because Ravindra and Vellapalath are accused of helping strip away valuable things from Byju’s US-based businesses, Epic! Creations and Tangible Play. These companies were supposed to be under the protection of a US court. But instead of following the court’s rules, the two men allegedly took more than $1 million in cash and valuable software that Byju’s had purchased. This has upset lenders who are trying to recover money that Byju’s owes them.
At a recent court hearing, a US Bankruptcy Judge, John T. Dorsey, said he would issue an order forcing Ravindra and Vellapalath to explain their actions. If they don’t have a good reason, they could face serious financial penalties and be declared in contempt of court.
Lenders Push for Punishment
Byju’s, which is known for its learning apps, owes more than $1.2 billion to lenders in the US. A few years ago, the company bought Epic! Creations and Tangible Play for $820 million. However, Byju’s has been struggling with its finances. The company is currently in bankruptcy in India, after failing to repay a large amount of debt to its lenders.
Show Cause Notices Issued to Byju’s and Think & Learn Private Limited by Adjudicating Authority
The lenders in the US are now fighting to take control of Byju’s US software businesses. The court is involved in deciding what should happen with these companies. But instead of cooperating with the court’s rules, Ravindra and Vellapalath allegedly took control of the cloud accounts of the two US companies. This led to the removal of money and important platforms that students use to learn. The lenders have asked the court to punish these executives for their actions, which they believe were illegal and unfair.
A businessman from Nebraska, William Hailer, had been helping Byju’s regain control of the US companies. However, after seeing what was happening, Hailer stopped working with Byju’s and accused them of using unethical business practices. According to Hailer, Byju’s had hidden money and made misleading claims in order to regain control of its failing businesses. Hailer later told the court that he no longer wanted to be involved in any more of these activities.
Voizzit’s Claims Are Rejected
Vellapalath, who founded Voizzit Technology, appeared in court by video from Dubai. He argued that Voizzit was legally allowed to take control of the US companies because Voizzit had loaned Byju’s more than $100 million in 2023. According to Vellapalath, this gave Voizzit the right to own Epic! and Tangible Play. However, the judge did not accept this argument.
Judge Dorsey said that he didn’t believe Vellapalath’s explanation and didn’t find him credible. This was a major blow to Voizzit’s claims. The judge has now ordered further investigations to determine if the actions of Ravindra and Vellapalath were legal. The future of the two executives depends on their ability to explain why they took these steps and to avoid being held responsible for violating court rules.
Byju’s is already in a difficult situation, dealing with lawsuits in both India and the US. The company’s founder, who is also involved in the legal disputes, has been accused of hiding millions of dollars in loan money that should have been used to pay creditors. The company is also facing a legal process in India, where it is trying to find ways to repay its debts.
The fight between Byju’s and its creditors continues to escalate. With a US judge now considering financial penalties for key company leaders, the tech giant’s troubles seem far from over.
