Byju’s executive, business partner found in contempt of US court
Byju's Vinay Ravindra and Rajendran Vellapalath failed to answer questions about their roles in stripping software, cash and other assets from Byju's US businesses.
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Byju’s manager Vinay Ravindra and company ally Rajendran Vellapalath were found in contempt of court. Both are now facing a financial sanctions of $25,000 a day for refusing to comply with a US court order, according to a Bloomberg report.
Both failed to answer questions about their roles in stripping software, cash and other assets from Byju’s US businesses that are under court supervision.
Read more: Byju’s controversies that made headlines
A federal judge in Delaware found that Vellapalath’s tech business- Voizzit Information Technology, violated the court order by filing a lawsuit in India in order to take control of assets owned by Byju’s education businesses in the US.
Because those units — Epic! Creations and Tangible Play — are under the supervision of a US bankruptcy court, it is a violation of US law to try to seize their assets, even if the action takes place in foreign court, the report said.
It is the third time that a US judge has found a member of the inner circle of company founder Byju Raveendran of violating a court order in the long-running dispute between the education technology firm and lenders owed more than $1.2 billion.
Vellapalath and Voizzit will try to resolve the contempt order immediately.
The report quoted their attorney, Maureen Abbey Scorese saying, “Our clients’ intention has always been to act in good faith, and we are taking immediate steps to ensure that any concerns raised by the court are addressed promptly and effectively. The entities in question are established, reputable companies, and we hope that the business operations will be back on track soon.”
Bjyu's used to be India's leading online education platform, which valued around $22 billion at its peak. But, the company found itself in trouble with the law and central agencies because of subdued demand and irregularities in foreign investments.
Byju's US arm, Byju’s Alpha Inc., became embroiled in controversy when it was sued by lenders in the United States for allegedly hiding $500 million in 2023. Following a Delaware court's ruling favouring the lenders, Byju's Alpha Inc. filed for bankruptcy. The CEO stated that Alpha Inc. lacked the financial means to continue disputing the debt with its parent company.
