Byju's Titan Riju Ravindran Explodes: Accuses Creditor of HUGE FDI Rule Breach! NCLT Battle BEGINS!

Law/Court

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Updated on 16 Nov 2025, 07:43 am

Riju Ravindran, promoter and suspended director of Think & Learn Pvt Ltd (Byju's parent company), has approached the National Company Law Tribunal (NCLT) with serious allegations against Glas Trust Co, a US-based financial creditor. Ravindran claims that an agreement for Compulsorily Convertible Debentures (CCDs) inked between Think & Learn Pvt Ltd and a subsidiary of Glas Trust is violative of India's Foreign Direct Investment (FDI) and Foreign Exchange Management Act (FEMA) regulations. The primary contention is that this CCD arrangement, intended to raise finance for participating in Aakash Educational Service Pvt Ltd's (AESL) ongoing rights issue, is not genuine FDI but rather an external commercial borrowing (ECB) in substance, which is prohibited. Furthermore, Ravindran alleges it is being falsely presented as interim finance or Corporate Insolvency Resolution Process (CIRP) cost simultaneously, which is legally contradictory. Glas Trust, holding a significant 99.25 per cent voting rights in Think & Learn Pvt Ltd, proposed subscribing to these CCDs worth ₹100 crore. This proposal was discussed in a Committee of Creditors (CoC) meeting on November 5, 2025, where Glas supported it, but other members like Aditya Birla Capital and Incred abstained. The Resolution Professional (RP) approved the resolution due to Glas's majority voting rights, despite concerns raised by Ravindran's representatives regarding the legality and commercial propriety of the instrument during CIRP. Ravindran has requested the NCLT to set aside these resolutions and declare the CCD subscription agreement void, illegal, and unenforceable, arguing it fails to meet the 'fully, compulsorily and mandatorily convertible' test and constitutes unauthorized ECB. The matter is slated for hearing this week.

Impact This legal challenge is likely to further complicate Byju's already complex insolvency resolution process. It could impact the valuation and future prospects of its stake in Aakash Educational Services and potentially deter future foreign investment in similar distressed Indian companies if such complex financial instruments are perceived as regulatory loopholes. Increased scrutiny from regulators like the Reserve Bank of India and the Enforcement Directorate is also probable. Impact Rating: 7/10

Difficult Terms: NCLT (National Company Law Tribunal): A quasi-judicial body established to adjudicate corporate disputes in India, including insolvency and winding-up matters. Compulsorily Convertible Debenture (CCD): A debt instrument that can be converted into equity shares of the issuing company at a specified future time or upon certain conditions. FDI (Foreign Direct Investment): An investment made by an entity in one country into business interests in another country. FEMA (Foreign Exchange Management Act): Indian legislation that governs foreign exchange transactions and promotes orderly development of the foreign exchange market. ECB (External Commercial Borrowing): Loans obtained by Indian entities from foreign lenders, subject to specific regulatory guidelines. CIRP (Corporate Insolvency Resolution Process): A legal framework under the Insolvency and Bankruptcy Code (IBC) to resolve the financial distress of a corporate debtor. CoC (Committee of Creditors): A group of financial creditors formed during CIRP to oversee the resolution process and make key decisions. Resolution Professional (RP): An insolvency professional appointed by the NCLT to manage the CIRP and implement the resolution plan.