Legal troubles mount for BYJU'S founder in the US
What's the story
Byju Raveendran, the founder of edtech giant BYJU'S, has been held in civil contempt by the US Bankruptcy Court for the District of Delaware. The court found him guilty of not complying with its earlier orders pertaining to limited expedited discovery. The term 'discovery' in US law refers to a process where parties of a case obtain evidence and information from each other.
Penalty
Judge's scathing remarks against Raveendran
The court has ordered Raveendran to comply with the discovery orders or face a fine of $10,000/day for each day he remains in contempt. The judge noted that Raveendran missed all deadlines, failed to appear in court, and did not provide substantial documents. "I have seen a lot, but I have not seen strategic and patterned failure to provide meaningful, substantive responses to very basic and cogent questions that have gone on for more than a year," the judge said.
Asset sale
BYJU'S selling US assets under creditor pressure
Last month, it was reported that BYJU'S was selling its US assets at a fraction of their acquisition price under creditor pressure. The proceeds from these sales were intended to pay off BYJU'S creditors. On April 10, lenders had sued Raveendran, his wife Divya Gokulnath, and former company executive Anita Kishore in the US. The suit accused them of devising a scheme to hide and misappropriate $533 million from money lent to BYJU'S Alpha.
Fraud claims
Charges against BYJU'S
Prior to this incident, a bankruptcy court ruling had indicated that several fraudulent transfers and theft had taken place. The lenders also claimed that suspended director Riju Ravindran, Raveendran's brother, had violated his fiduciary responsibilities as a director of BYJU'S Alpha in the US. Meanwhile, in India, both brothers have approached the National Company Law Tribunal (NCLT) seeking a stay on the committee of creditors and removal of the resolution professional.