3Ed-tech start-up Byju's has breached loan terms that were worth $42 million. The company has been further asked by an arbitrator not to sell some shares of a group firm, as per a report by Reuters.
In this latest dispute, MEMG Family Office, a venture capital fund, started an arbitration proceeding against the company. This was due to an alleged nonpayment of loans worth $42 million via a pre-agreed share transfer from its group entity, Aakash.
As per the April 4 order by an arbitrator appointed under the Singapore International Arbitration Centre, Byju's should not dispose of its 4 million shares from Aakash. According to the loan agreement, the shares amounted to a stake of 6 per cent, last year.
Ritin Rai, the emergency arbitrator, wrote in the order that this was a "case of breach of the loan agreement," as per Reuters. The order further says that during the proceedings, Byju's mentioned that since it couldn't obtain approval from investors, it couldn't transfer the shares to MEMG.
This confidential order is the latest setback for Byju's, which is already in troubled waters for various reasons, including trouble within its management. Once valued at $22 billion in 2022, the company is now valued at $250 million.
Similarly, the founder of ed-tech start-up Byju's, Byju Raveendran, has been removed officially from the Forbes Billionaire list. Raveendran's net worth was Rs 17,545 crore ($2.1 billion) earlier. However, the figure has now slumped to zero on the index. Amid the ongoing crisis, a report by the Indian Express mentions that the ed tech company has also laid off 500 of its employees. The layoff is part of its restructuring programme. Similarly, the company fired more than 4,000 of its employees in 2023.
