In a significant legal battle, Riju Ravindran, co-founder and former promoter of Byju’s, has petitioned the National Company Law Tribunal (NCLT) to remove GLAS Trust Company LLC from its role as a financial creditor representing the edtech firm in its ongoing insolvency proceedings. Ravindran has accused GLAS Trust of fraudulently presenting itself as a legitimate creditor with the authority to represent a substantial portion of Byju’s debt, despite holding voting rights for only a fraction of the creditors. This legal maneuver threatens to derail the Corporate Insolvency Resolution Process (CIRP) initiated against Byju’s by the Board of Control for Cricket in India (BCCI).
A Controversial Move: Ravindran's Petition Against GLAS Trust
In a dramatic twist in the legal saga surrounding Byju’s, Riju Ravindran, co-founder of Think and Learn, the parent company of Byju’s, has filed a petition with the National Company Law Tribunal (NCLT), calling for the removal of GLAS Trust Company LLC from its role as a financial creditor. The petition, filed Thursday, questions the authority of GLAS Trust, which has been representing a portion of Byju’s creditors, and alleges that the company fraudulently claimed to possess the necessary authority to represent creditors in the Corporate Insolvency Resolution Process (CIRP).
Ravindran contends that GLAS Trust, while representing Byju's US-based creditors, does not have the legal mandate to act on behalf of the majority of the lenders. He claims that GLAS holds only 17.38 percent of the voting rights of the creditors involved in the term loan agreement. According to Ravindran, GLAS Trust has been unlawfully exerting control over the process, claiming authority that it does not possess, based on flawed representation to the tribunal.
The Core of the Dispute: Authority and Voting Rights
At the heart of Ravindran’s petition is the Credit and Guaranty Agreement (CGA) signed on November 24, 2021, in which Byju’s Alpha Inc, a subsidiary of Think and Learn, secured a USD 1.2 billion loan from a consortium of lenders. Ravindran argues that GLAS Trust's authority to act on behalf of these lenders is highly limited. The core issue arises from the fact that GLAS Trust has the mandate to represent only 17.38 percent of the term loan holders, significantly lower than the 50 percent required to take action on behalf of the broader group.
Under the terms of the agreement, GLAS Trust can only take certain actions if lenders holding more than 50 percent of the loan have authorized them to do so. Ravindran’s legal team asserts that the actions taken by GLAS are invalid, as they lack the requisite consent from a majority of the lenders, and therefore, the resolutions passed in these proceedings should be null and void.
The Alleged Fraud: Manipulation and Conspiracy
Ravindran has also raised concerns of fraudulent conduct by GLAS Trust. He claims that the firm has orchestrated a conspiracy involving Ernst & Young (EY) and Resolution Professionals to manipulate the CIRP process, thereby maintaining illegal control over Byju’s financial affairs. Ravindran’s petition further alleges that GLAS Trust has actively concealed its lack of authority to the tribunal, thereby misleading the NCLT into granting several orders that should never have been issued.
The petition also highlights that the disqualification mechanism built into the Credit Agreement effectively disqualified a large portion of the creditors, reducing the actual number of lenders GLAS could represent to a mere 17.38 percent. According to Ravindran, this reduction in GLAS Trust’s authority invalidates any decisions made by the firm during the insolvency process.
The Timeline: A Conflict of Interests and Default Notices
The turmoil began in March 2023, when GLAS Trust issued a notice of default, seeking to accelerate the term loan repayment—a move that took place well before the loan’s November 2026 maturity date. This early notice, Ravindran argues, was based on an overstep of its legal rights and was done without proper authorization from the majority of the lenders.
In response to these developments, Think and Learn invoked its contractual rights, issuing a letter of disqualification on June 5, 2023, aimed at blocking certain creditors it considered in violation of the terms of the loan agreement. Ravindran’s legal team insists that the failure to follow proper procedures in these actions renders the insolvency process legally untenable.
The Current Status: NCLT to Hear the Petition
As the legal battle intensifies, the Bengaluru bench of the NCLT is set to hear Ravindran’s petition on Friday. In his application, Ravindran has sought the immediate removal of GLAS Trust from the Committee of Creditors (CoC), arguing that any decisions made with GLAS Trust’s involvement should be deemed invalid.
Additionally, Ravindran is asking the tribunal to stay the ongoing CIRP until GLAS proves its legal authority under the terms of the Credit and Guaranty Agreement. The outcome of this case could have major implications not only for Byju’s financial restructuring but also for the broader insolvency and debt resolution landscape in India’s corporate sector.
Byju’s Under Pressure: A Broader Impact on the Edtech Sector
This dispute over the authority of GLAS Trust underscores the larger financial troubles facing Byju’s, which has been under increasing scrutiny as its debt problems spiral. As the edtech sector continues to grapple with its own set of challenges, particularly concerning liquidity and regulatory concerns, Byju’s financial and legal troubles could set a precedent for how the industry handles complex debt resolutions in the future.
With a pending USD 1.2 billion debt and ongoing legal disputes, the stock market situation surrounding Byju’s remains volatile. The company’s ability to resolve its insolvency proceedings and stabilize its finances will be crucial in determining its long-term viability in a highly competitive market.
Conclusion: A Complex Legal Battle with Far-Reaching Consequences
As the NCLT prepares to hear Ravindran’s petition, the legal drama involving Byju’s and GLAS Trust continues to unfold. At stake is not only the future of Byju’s but also the broader edtech and insolvency sectors in India. Whether or not Ravindran’s claims are upheld will likely influence how financial restructurings are managed in the future and whether the rules governing creditor representation are tightened.
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