“When the US lenders called a default and filed in the Delaware court, within two weeks, all three directors resigned. Those three board members resigning together..is what made it almost impossible for us to do any more fundraising or equity raising. Even if they wanted to resign, if a transition or a vote for reconstitution had been planned, the company wouldn’t be in the situation it is today,” Raveendran told reporters at a press conference.
“Some of them (board members) got worried about the liabilities that would come with that kind of filing,” he said, adding investors are always focused on financial outcomes and that they ‘threw Byju’s under the bus’ at the first sign of crisis.
In June 2023, ET first reported that early backer GV Ravishankar, managing director at Peak XV Partners (formerly Sequoia Capital India), along with Russell Dreisenstock of Prosus (previously Naspers) and Vivian Wu of Chan Zuckerberg Initiative, had stepped down from Byju’s board.
Raveendran said that the $1.2 billion term loan secured from US lenders was used for both organic and inorganic international growth, including several smaller global acquisitions. “I thought we made the best decision in the world when we took the Term Loan B (TLB). It was the easiest capital, but it became the most expensive one,” he added.
“Everything started with the liquidity crunch…while we were still half way through most of our acquisitions,” he said while highlighting that the global financial environment began to change, with the Federal Reserve planning to halt its bond-buying programme ahead of raising interest rates.
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Raveendran, who lives in Dubai, said he plans to come back to India and fill stadiums again but his hands are tied on India operations till online litigations are underway. “I have been on the edge so many times. For me, it’s a mission, not a business. I will make a comeback, and nobody can stop me from completing my mission,” he said.
He reiterated investors fled away at the first sign of crisis and that he has been investing in the company despite Byju’s being in bankruptcy proceedings.
The National Company Law Tribunal (NCLT) on June 16 ordered initiation of insolvency proceedings against Byju’s, on a BCCI petition claiming Rs 158 crore in arrears over a sponsorship deal.
Raveendran said there is no fraud in the company and investors threw him under the bus.
“We have not made any intentional mistakes. We have never siphoned off money. There is no fraud. If there were fraud, the founders would take money out, but we have reinvested our money back into the company,” he added.
The US lenders, represented by Glas Trust Co LLC, had opposed the settlement between Byju’s and the Board of Control for Cricket in India (BCCI) alleging the money paid by Raveendran’s brother Riju Ravindran was tainted. Raveendran said that the decision to settle with the BCCI first was because the cricket body was the largest creditor.
The US lenders earlier asserted that the edtech must repay the $1.2-billion term loan it had taken from them, along with interest. The edtech company had failed to make any contractually due payment in more than 17 months, the lenders had said.
On August 27, a group of investors including General Atlantic Singapore TL Pte Ltd, Peak XV Partners Investments IV, Peak XV Partners Investments V, Sofina SA and MIH Edtech Investments, which together own 16.75% of the company’s issued and paid-up share capital, moved the Supreme Court.
They alleged “persistent acts of oppressive opacity, repeated violation of law and corporate governance norms, and gross mismanagement by the founders in managing the affairs of the company.”
