MUMBAI: The Karnataka High Court has barred Byju Raveendran, founder of the troubled edtech firm, from selling or transferring any assets, in yet another setback for the once-celebrated startup. The order follows a petition by Qatar Holdings LLC, seeking enforcement in India of a $235 million arbitral award.

Qatar Holdings, a subsidiary of Qatar Investment Authority (QIA), had lent $150 million to Byju’s in 2022 when the company was looking to invest in test-prep firm Aakash Institute.

A bench led by Justice R. Natraj, in his order on Monday, said, “Since the petitioners (Qatar Holdings) sought for an interim injunction to restrain the respondents (Byju’s) from alienating the assets (mentioned in schedule A & B), it is appropriate that the respondents are put on terms before granting an adjournment to file objections. In view of the above, the respondents are restrained by way of interim injunction from alienating, encumbering or transferring the properties till the next date of hearing.”

The dispute dates back to September 2022, when Qatar Holdings provided the $150 million loan to Byju’s Investments Pte Ltd (BIPL), personally guaranteed by Raveendran, the co-founder and main shareholder of Think & Learn Pvt. Ltd. (Byju’s).

Part of the money was used to acquire 17.89 million shares in Aakash Educational Services Ltd., under an agreement that explicitly prohibited transferring the shares. However, the shares were later moved to another Singapore-based company controlled by Raveendran, in violation of the clause.

After repeated defaults, Qatar Holdings cancelled the financing deal and demanded early repayment of $235 million. Both BIPL and Raveendran failed to meet their contractual and personal guarantee obligations.

Meanwhile, Qatar Holdings pursued arbitration in Singapore. In March 2024, an emergency arbitrator ordered a global freezing of assets worth up to $235 million belonging to Raveendran and BIPL to prevent dissipation. The Singapore High Court later upheld this order.

On 14 July, the Singapore International Arbitration Centre (SIAC) directed immediate payment of $235 million to Qatar Holdings. The court also ruled that interest, compounded daily at 4% since February 2024, must be paid. This has already added over $14 million to the total, pushing the amount owed to more than $249 million ( ₹2,183 crore).

In the Karnataka High Court, counsel for Qatar Holdings demanded an injunction against asset transfers and sought the attachment or sale of movable and immovable properties owned by Raveendran or BIPL in India.

Rishab Gupta, counsel for Byju’s, told the court that his client had not been served a copy of Qatar Holdings’ petition and sought more time to file objections. The court then directed Qatar Holdings to furnish the petition to Byju’s.

“This partial award is being challenged before a Singapore High Court,” Gupta told the court. “We are happy to give an undertaking to not alienate any assets until the next hearing. That is also an undertaking that we have given to this court in a separate matter.”

Byju’s woes

The edtech company’s troubles have deepened over the years, with the company dragged into insolvency on 16 June 2024, after defaulting on a ₹158 crore payment to the Board of Control for Cricket under a jersey sponsorship agreement. The deal, signed in 2019 and extended until November 2023, collapsed after payment failures triggered insolvency proceedings.

In the US, Byju Raveendran has been accused of contempt of court in a separate dispute. In April, Byju’s Alpha Inc., a US-based special purpose finance vehicle of the company, sued its parent, along with Raveendran, his wife Divya Gokulnath, brother Riju Ravindran, and executive Anita Kishore, accusing them of stealing $533 million. That case is before the US Bankruptcy Court for the District of Delaware.

Founded in 2011 by Raveendran and Divya Gokulnath, Byju’s was once India’s most celebrated edtech startup, achieving unicorn status and attracting global investors.

However, its aggressive expansion led to financial strain, regulatory scrutiny, and mounting disputes with creditors—marking a dramatic downfall for what was once India’s most celebrated startup.