Lenders are seeking to hold Ravindra and Vellapalath accountable for taking control of the cloud-based accounts of the Byju's U.S. companies Epic! Creations and Tangible Play
Troubled Indian edtech firm Byju's has faced another legal setback as its chief content officer Vinay Ravindra and an ally of the company’s founder Rajendran Vellapalath are under legal scrutiny in the United States, as per Bloomberg. The executives faced financial sanctions for their roles in allegedly draining assets from the edtech company's businesses which are under court supervision.
Ravindra and Vellapalath are accused of stripping software, cash and other assets from BYJU’S-owned businesses Epic! and Tangible Play, which are currently facing bankruptcy proceedings. On failing to justify their actions, the duo will be held for contempt of court and will face financial penalties. Reportedly, a federal judge is considering imposing millions of dollars in sanctions on both.
As per reports, Vellapalath, founder of Dubai-based tech startup Voizzit Technology, attending a court hearing via video conferencing contended that Voizzit is the owner of Epic! and not BYJU’S. He also claimed to have lent Byju's over $100 million in debt and had the right to takeover its US-based subsidiaries.
Lenders owed over $1.2 billion are fighting to sell off U.S. education software companies that Byju’s acquired for $820 million a few years ago. Byju's is in bankruptcy in India after defaulting on the debt it owes US lenders.
Lenders are seeking to hold Ravindra and Vellapalath accountable for taking control of the cloud-based accounts of the Byju's U.S. companies Epic! Creations and Tangible Play. They accused them of draining them of more than $1 million in cash plus valuable internet platforms used by students and other assets.
In November, Nebraska businessman William Hailer informed the courts that he had spent months assisting Byju Raveendran, founder of Byju's, in attempting to regain control of Byju’s U.S. software companies, which are currently being managed by a court-appointed trustee. However, the effort was unsuccessful, and Hailer eventually separated from Raveendran, accusing him of unethical business practices.
As per a court declaration filed by Hailer, Byju's companies and assets are under court supervision in both India (parent company base) the US (subsidiaries).