The Qatar Investment Authority (QIA) has filed a petition with the Karnataka High Court seeking to compel Byju Raveendran, the founder of Byju’s, to disclose his personal assets and block their transfer. This legal action adds to the mounting challenges faced by Raveendran as he distances himself from his struggling edtech company.
QIA, a prominent foreign investor in India, is requesting the court to prevent Raveendran from selling, pledging, or transferring his assets. The wealth fund aims to claim up to $235.19 million of Raveendran’s personal assets, as detailed in court documents. QIA had invested in Byju’s in 2019 and 2022, and also provided Raveendran with a $250 million loan in March 2022. This loan was used to reinvest in Byju’s during its last funding round when the company was valued at $22 billion.
The court filing by QIA seeks an injunction to restrain Raveendran and his associates from dealing with, selling, or transferring any of their assets. This case is notable for being one of the rare instances where an investor demands details of a founder’s personal assets. While the full extent of Raveendran’s assets remains unclear, it is known that he holds a minority stake in Aakash Education Services, a valuable part of the Byju’s group.
Legal experts suggest that if a personal guarantee was issued, lenders could enforce it through legal proceedings in case of default. However, QIA’s filing does not clarify whether such a guarantee was provided. The last high-profile case involving the enforcement of a personal guarantee was with Vijay Mallya, the founder of Kingfisher Airlines.
QIA has sought relief under Section 9 of the Arbitration and Conciliation Act, 1996. The respondents in this case include Raveendran and Byju’s Investments, a Singapore-based entity controlled by Raveendran and his family.
In 2022, QIA lent $250 million to Raveendran against his shares in Think & Learn Pvt. Ltd., which he reinvested in Byju’s at its peak valuation. This transaction was part of an $800 million funding round announced in March 2022, which also included equity investors such as Vitruvian Partners, Oxshott Capital Partners, and Sumeru Ventures. Although Oxshott and Sumeru did not finalize their investments, Raveendran successfully raised $350 million personally, with $250 million from QIA and $100 million from IIFL Holdings.
Byju’s reported raising $250 million in October 2022, including contributions from QIA, although specific details were not disclosed. Earlier, QIA led a $150 million investment in Byju’s in July 2019.
QIA’s stake in Byju’s could be at risk due to a proposed $200 million rights issue scheduled for January 2024, which could significantly lower the company’s valuation and dilute the stakes of non-participating investors. Several investors, including Sofina, Prosus, Peak XV, and General Atlantic, are challenging the legality of the rights issue at the National Company Law Tribunal and seeking to remove the current management, citing suppression of minority rights and misgovernance by the founders.
Additionally, Byju’s faces a dispute with overseas lenders over a $1.2 billion loan taken out in November 2021. The company recently encountered insolvency issues after the Indian cricket board, BCCI, took legal action over ₹150 crore in unpaid dues. Byju’s has appealed this order, and if unsuccessful, Raveendran may lose control over Think & Learn.
QIA’s legal action represents a significant development in the ongoing financial and legal difficulties surrounding Byju’s and its founder.
