An urgent arbitrator’s order has impeded Think and Learn, the widely-known edtech company behind the brand name Byju’s, from selling about 6% of its subsidiary, Aakash Education Services Limited (AESL). This intervention stems from the company’s failure to repay a substantial sum, roughly amounting to ₹350 crore, borrowed from the MEMG Family Office, led by billionaire doctor Ranjan Pai.
Arbitration proceedings, driven by the family office of MEMG, were undertaken in March, which formed an essential part of the loan agreement intended for Byjus to extend the loan term. The counsel learned to be said of that the Emergency Arbitrator that had been empowered by the institution of the Singapore International Arbitration Centre has issued the orders on April 4 within the jurisdiction of India. Therefore, a Creepy clause has been included in a way that Byjus is not allowed to deny any incorporation claims of Aakash Educational Services Limited.
Despite attempts to seek clarification from both Byju’s and MEMG, responses to email inquiries were not forthcoming. Nevertheless, an unnamed source within Byju’s indicated that the arbitration ruling effectively maintains the current state of affairs, asserting that it doesn’t undermine the value of either AESL or Think and Learn. The source further emphasized that the arbitration process, initiated by MEMG, is primarily procedural, and negotiations are underway to address the matter with the best interests of both companies in mind.
The learning platform Byju’s, one of the major edtech players, has faced financial strain in the early months of the pandemic due to the difficulties in paying staff’s salaries and in particular in keeping up that commitment. A major legal challenge that portends some serious difficulties to the company just cropped up, and it confirms that the company is indeed swimming among the rocks.
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