Byju's defamation threat an attempt to distract from facts: Glas Trust

Glas Trust, a US-based lender agent, has alleged that edtech company Byju's founders’ plan to file a defamation case is an attempt to distract from the facts after several court orders against them.

J Michael McNutt, the legal counsel of Byju's founders, rejected the allegations levelled by Glas Trust, calling it “incomplete and misleading”.

$2.5 billion suit

The counsel of Byju's founders, Byju Raveendran and Divya Gokulnath, on Thursday (July 18) said they are gearing up to file an over $2.5 billion suit against Glas Trust and others for damage to their reputation and business.

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"Byju Raveendran's latest act of threatening defamation claims against GLAS Trust and the Term Loan B Lenders is a transparent attempt to distract from the facts, coming on the heels of a US federal court holding him in contempt. The fact of the matter is that every court to consider the issues has ruled against Raveendran and his cohorts," Glas Trust said.

Glas Trust Company LLC is the trustee for lenders to whom Byju's owes $1.2 billion. Byju's founders have, however, contested Glas Trust claims.

Glas Trust now controls Byju's Alpha, which was a special-purpose financing vehicle established by the edtech firm to receive Term Loan B funds.

Lawsuit against Raveendran, wife

Byju's Alpha has filed a lawsuit against Raveendran, his co-founder and wife Divya, and his consigliere Anita Kishore, alleging that each of them co-orchestrated and executed a lawless scheme to conceal and steal $533 million of loan proceeds.

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Glas Trust said judgments exceeding $533 million have been entered against Raveendran's allies, "including for their fraudulent conduct".

"Raveendran's brother was found by a Delaware federal court to be untruthful and one of the most incompetent directors in Delaware's history. A Delaware federal court stated its intention to make a criminal referral when Raveendran attempted to bribe a witness and had held Raveendran in contempt," Glas Trust alleged.

The US lenders' agent said that it has at all times acted within its rights.

'Co-horts term is offensive'

"Mr Raveendran's threats are desperate and meritless, and the irony of Mr Raveendran threatening to sue for defamation when he continues to unlawfully conceal what happened to the missing USD 533 million should be lost on no one," Glas Trust said.

McNutt alleged that GLAS Trust continues to distract from the true situation in India.

"It is incorrect to claim that US Courts have ruled against Raveendran and his 'co-horts' on the relevant issues. The proceedings in Delaware against Byju have only just commenced, and Byju has not even submitted his response to the complaint," the counsel said.

McNutt said Raveendran has not been found guilty of any wrongdoing by any court, in any jurisdiction, and the contempt order against Byju is being contested.

He said that the term “co-horts” is misleading and offensive.

(With agency inputs)