Byju’s, the ed-tech company, faces mounting challenges as its shareholders call for Byju Raveendran’s departure amid a financial downturn. Additionally, overseas creditors are increasing pressure on the company due to missed payments. Bjyu’s used to be India’s leading online education platform, which valued around $22 billion at its peak. But, the company found itself in trouble with the law and central agencies because of subdued demand and irregularities in foreign investments.
To make matters worse, a US court has ruled in the favour of Byju’s foreign investors who are seeking timely payment from the company, and the shareholders will be pushing for the removal of the founders from major positions in Byju’s. Another bad news for Byju’s was announced on Friday in the US when a segment of Byju’s was put into bankruptcy by a court-appointed agent who took over the company after it claimed to be in a debt of $1.2 billion. Timothy Pohl, the Chief Executive Officer of Byju’s Alpha Inc., stated in court documents that the company lacks sufficient funds to continue its legal dispute with its parent company over the debt.
Here are five other instances when Byju’s was under the limelight for wrong reasons:
ED raids and FEMA violations
In April 2023, three offices of Byju’s in Bengaluru were raided by the Enforcement Directorate (ED), for suspected violations of the Foreign Exchange Management Act (FEMA). A FEMA violation notice of ₹9,362.35 crore was given to Byju’s by the ED, which is what set-off the education giant’s downfall.
Byju’s vs Lenders in US Court
One of the most alarming issues in Byju’s history is the $1.2 billion dollar loan which it took from US lenders, which were apparently taken to improve the company’s finances. They were later accused by the money lenders of late payments, and in return the ed tech company filed a lawsuit against one of the money lenders stating that they’re being put under a lot of pressure for loan repayment.
The US division of Byju’s controversial history
Byju’s US arm, Byju’s Alpha Inc., became embroiled in controversy when it was sued by lenders in the United States for allegedly hiding $500 million. Following a Delaware court’s ruling favouring the lenders, Byju’s Alpha Inc. filed for bankruptcy. The CEO stated that Alpha Inc. lacked the financial means to continue disputing the debt with its parent company.
Byju’s widespread layoffs and disruptions in payroll processing
In June 2023, Byju’s declared layoffs for more than 1000 employees from various domains such as mentoring, logistics, training, sales, etc. Additionally, 400 workers were fired in August after a performance review cycle. Several employees reported that they weren’t paid any salary for months, and even the dues of the laid off employees were unclear.
Shareholders of Byju’s aiming to remove Byju Raveendran from his position
Six investors in Think and Learn Private Limited, the company operating under BYJU’s brand, have requested an extraordinary general meeting to tackle concerns within the edtech giant. Their agenda includes stripping the founders of control over the company and removing Byju Raveendran from the CEO position, intensifying internal conflicts within the organisation, according to PTI.
Read More: Explained: No end in sight for Byju’s woes; what went wrong?