Byju’s founder Byju Raveendran mortgages homes to pay salary of employees
Byju’s founder Byju Raveendran mortgages homes to pay salary of employees
By: Pune Pulse
December 5, 2023
Pune: Byju Raveendran, the founder of leading educational technology company Byju’s, has made a commitment to utilize his and his family’s residential properties to generate funds for covering the salaries of the employees amidst the company’s financial constraints.
As per reports, Raveendran’s family possesses two residences in Bengaluru, along with an ongoing villa construction in Epsilon. These properties were utilized as collateral to secure a loan of $12 million. The borrowed funds were subsequently utilized to cover the salaries of approximately 15,000 employees working for Byju’s parent company, Think & Learn Private Limited.
As per the information provided, the edtech company has encountered numerous obstacles, one of which is a financial strain. Additionally, the company is currently engaged in a legal dispute regarding a defaulted interest payment on a $1.2 billion term loan.
As per the information received, Raveendran has committed his entire shareholding in the parent company as collateral and has obtained debts totalling approximately $400 million. Additionally, he has repaid the company the $800 million he had previously raised by selling shares, resulting in a shortage of cash for him.
Last year, Byju faced challenges that led to the layoff of 2,500 employees in order to save funds. This year, the ed-tech company had to lay off approximately 1,000 employees and requested that other employees resign voluntarily. However, Byju’s has chosen to delay offer letters to new employees for a period of six months. Several individuals who were scheduled to join the company have stated that their offer letters have been postponed, with certain individuals being notified that their start date has been pushed back until January 2024.
In May, the Enforcement Directorate (ED) discovered potential forex infractions by Byju’s totalling Rs 9,000 crore after conducting searches at three locations in Bengaluru. The case pertains to Raveendaran and his company ‘Think & Learn Private Limited’ and falls under the purview of the Foreign Exchange Management Act (FEMA). Byju’s has refuted any association with FEMA as reported.
