Byju Raveendran, the founder of ed-tech firm Byju's, has pledged his under-construction villa and the residences of his family members worth Rs 100 crore as collateral to pay employee salaries, according to report.
The family's two Bengaluru homes and an under-construction villa in Epsilon, an exclusive gated community, were used as collateral to secure a US dollar 12 million loan (approximately Rs 100 Crore), as per the report, citing people aware of the matter.
The loan was used by the ed-tech firm to cover the salaries of 15,000 employees working at Byju's parent company, Think & Learn Pvt., on Monday, the report added.
Byju's Valuation Drops from US dollar 22 Billion to Under US dollar 3 Billion in 12 Months
Amid the Covid pandemic, Byju's is facing cash-flow issues and a disagreement with creditors concerning a US dollar 1.2 billion loan. Shareholders such as Prosus and Blackrock have sequentially reduced Byju's valuation over the past year to US dollar 11 billion in March, US dollar 8 billion in May, US dollar 5 billion in June and the recent US dollar 3 billion in November 29.
In the aftermath of the Covid-19 pandemic, Byju's, a prominent player in India's startup landscape, faces mounting challenges. The company, once celebrated for its growth, finds itself in a complex situation after failing to repay a substantial US dollar 1.2 billion loan, leading to legal disputes with creditors.
The company invested highly during the pandemic-induced closures of educational institutions, acquiring multiple edtech startups both in India and the US. However, their rapid expansion encountered many challenges as growth slowed significantly as soon the schools resumed operations.
Apart from this, prolonged legal battle worsens the company's woes, making things harder for them.
By October 2022, Byju's had a valuation exceeding US dollar 22 billion after securing US dollar 250 million in a funding round.
NCLT Issues Notice To Ed-Tech Firm Over BCCI's Plea Claiming ₹158 Crore Default
The BCCI filed a petition claiming dues of Rs 158 crore as an operational creditor under section 9 of the Insolvency & Bankruptcy Code 2016.
Admitting the BCCI's petition, a two-member bench based in Bengaluru at the National Company Law Tribunal (NCLT) issued a notice to Think & Learn on November 28, 2023.
BYJU's Receives ED Show Cause Notices Over Rs 9362.35 Crore FEMA Violations
The Adjudicating Authority under FEMA, 1999 has issued Show Cause Notices to M/s Think & Learn Private Limited and Byju Raveendran on November 21 following a complaint filed by the Directorate of Enforcement (ED). The notices pertain to alleged contraventions of FEMA, 1999 amounting to Rs. 9362.35 Crore. The ED initiated an investigation based on complaints related to foreign investment received by M/s Think and Learn Private Limited and the company's business operations.
