The United States-based lenders of embattled education technology company Byju's have urged the National Company Law Tribunal (NCLT) to restrain the company from pledging, selling or transferring its shares.
The lenders, who filed the insolvency plea through US-based non-bank loan agency Glas Trust Company LLC, told the tribunal on May 29 that Byju's was borrowing more money and alienating its shares in exchange, thereby “causing grave prejudice to them”.
Even after they filed the plea in February, promoter Raveendran Byju borrowed Rs 350 crore in exchange for some of his shares, the lenders alleged.
Since Byju was based in Dubai, they would be left with no one to prosecute and recover the money from if he continued borrowing money in exchange for shares, they said.
Noting that close to 10 insolvency petitions were pending against Byju's in the Bengaluru bench of NCLT, the lenders said the cases spoke of the company's financial condition.
The lenders urged the NCLT to pass an immediate stay order to protect their interests.
Byju's countered the request by saying, it needed time to file a response to the plea.
The lenders’ claims were not substantiated by proof and the allegations were being made without giving the company and the promoter an opportunity to respond, Byju’s argued.
The case will next be heard on June 10.
Glas Trust represents over 100 lenders who loaned money to Byju's' US entity, Byju's Alpha Inc, which is undergoing a voluntary bankruptcy process in a Delaware court.
According to senior advocate Uday Holla, who appeared for Glas Trust, Think and Learn, which operates Byju's in India, stood guarantee to the $ 1.2-billion (Rs 8,000 crore) loan.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
