Glas Trust Hits Back At Byju’s Defamation Threat, Calls Claims ‘Desperate And Meritless’

The founders of Byju's, Byju Raveendran and Divya Gokulnath, announced plans to file a defamation suit worth over $2.5 billion against Glas Trust and others, alleging reputational and business harm.

According to Glas Trust, judgments exceeding $533 million have already been passed against associates of Raveendran for “fraudulent conduct.”

Source : BYJU's

The ongoing dispute between edtech firm Byju's and its US-based lender agent, Glas Trust Company LLC, took a sharp turn as both sides traded fresh accusations amid multiple legal proceedings.

The founders of Byju's, Byju Raveendran and Divya Gokulnath, announced plans to file a defamation suit worth over $2.5 billion against Glas Trust and others, alleging reputational and business harm, reported PTI. Their legal counsel, J Michael McNutt, described the claims made by Glas Trust as "incomplete and misleading".

The counter from Glas Trust was swift and strongly worded. Calling Raveendran’s proposed lawsuit a diversion tactic, the lender’s agent said, “Byju Raveendran's latest act of threatening defamation claims against GLAS Trust and the Term Loan B Lenders is a transparent attempt to distract from the facts, coming on the heels of a US federal court holding him in contempt.”

Glas Trust Alleges Fraud, Contempt and Missing Funds

Glas Trust, which represents lenders owed $1.2 billion by Byju’s, currently controls the entity Byju's Alpha – a special-purpose vehicle created to manage funds from the Term Loan B arrangement. The firm has filed a lawsuit in the US against Raveendran, his co-founder and wife Divya Gokulnath, and their associate Anita Kishore, accusing them of orchestrating a "lawless scheme to conceal and steal $533 million of loan proceeds."

According to Glas Trust, judgments exceeding $533 million have already been passed against associates of Raveendran for “fraudulent conduct.” The lender added that a Delaware federal court has even described Raveendran’s brother, a suspended director at Think & Learn (Byju’s parent company), as “untruthful and one of the most incompetent directors in Delaware's history.” The court also held Raveendran in contempt and indicated a potential criminal referral when he was found to have attempted to bribe a witness, Glas Trust alleged.

Dismissing Raveendran’s legal threats as “desperate and meritless,” the US lender said, “The irony of Mr Raveendran threatening to sue for defamation when he continues to unlawfully conceal what happened to the missing $533 million should be lost on no one.”

Byju’s Legal Team Refutes Claims, Cites Ongoing Indian Proceedings

In response, McNutt defended the company’s actions and said it was misleading to state that courts had ruled against the Byju’s founders. He clarified that proceedings in Delaware were only beginning and that Byju Raveendran had not even submitted his response to the complaint. “It is incorrect to claim that US Courts have ruled against Raveendran and his 'co-horts' on the relevant issues,” he said, adding that the term “co-horts” itself was “misleading and offensive.”

McNutt also pointed out that Raveendran had not been found guilty of any wrongdoing in any court across jurisdictions, and the contempt ruling was under legal challenge. He further argued that the earlier court orders involving Think & Learn, its subsidiary, and Raveendran’s brother were passed in the absence of legal representation due to bankruptcy proceedings in India.

The legal battle between Byju’s and Glas Trust spans both US and Indian courts. Glas Trust has also challenged the National Company Law Appellate Tribunal’s dismissal of the insolvency proceedings against Byju’s. The Supreme Court of India allowed Glas Trust’s appeal, and the Corporate Insolvency Resolution Process (CIRP) case continues. In parallel, Byju’s founders have filed a plea seeking the removal of the Interim Resolution Professional, citing a conflict of interest through his links to consultancy firm EY, which they claim is associated with Glas Trust.

As the high-stakes legal clash continues to unfold, both sides remain locked in a fierce battle to control the narrative and the future of the embattled edtech giant.