Debenture Dilemma: Byju's Financial Woes Deepen Amid Legal Battle

Riju Ravindran has filed a case against Think & Learn Pvt Ltd's financial maneuver with Glas Trust Co, alleging violations of FDI and FEMA regulations. The deal, purporting to be foreign investment, is argued to be an illegal foreign debt to raise funds for participation in a rights issue.

Riju Ravindran has moved to challenge the Compulsory Convertible Debenture (CCD) agreement between Think & Learn Pvt Ltd and Glas Trust Co, its US financial creditor, in the insolvency tribunal NCLT. Ravindran contends that the CCD deal breaches FDI and FEMA regulations.

The contentious agreement aims to secure funds for the rights issue of Aakash Educational Service Pvt Ltd, after Glas Trust's failed legal bids at NCLAT and the Supreme Court. Presently, Glas holds majority voting rights in the insolvent Think & Learn Pvt Ltd, associated with Byju's.

Ravindran, a suspended director at Think & Learn, argues that the CCD is misleadingly presented as FDI under FEMA but essentially qualifies as an illicit external commercial borrowing. He seeks NCLT's intervention, asserting that the agreement is void under Indian law.

(With inputs from agencies.)