Byju Raveendran Breaks Silence on Salary Delays, Legal Challenges

BYJU's Founder Accuses Lenders of Unfair Tactics, Promises Company Revival

The letter is a response to the ongoing challenges faced by BYJU's, including delayed salary payments and negative media coverage. Raveendran attributes these issues to a legal dispute with foreign lenders and a temporary stay on a favorable court ruling. He assures employees that their salaries will be paid as soon as the company regains control of its finances.

To counter negative allegations, the CEO provides details about the company's financial situation, including the founders' significant investments in the company and the sources of funds used to settle a dispute with the BCCI. He also clarifies the nature of the ED investigation and defends the company's decision to remain an Indian-based entity despite pressure to move operations overseas. Raveendran concludes by expressing optimism about the company's future and its commitment to employees and students.

Full Text of the Letter from Byju Raveendran to His Employees

Dear Team Member,

In the past few months, so much has been said and written about me that its content would fill libraries. I have felt like a man screaming into a hurricane of hurdles. It has been challenging for me as a founder, a father, a son, a brother and a husband. 

Today, once again, I am reaching out to say we will prevail, though I admit that every legal roadblock has lengthened our long trek to recovery. Truth must first be spoken, heard, and championed to triumph.

Before I get there, I want to address the matter of utmost concern to you - and to me as well. Your salary for July 2024 has not been credited yet. I understand how crucial this is, and I want to explain the situation clearly. Our company recently faced a serious challenge that pushed us into insolvency due to a dispute with the BCCI. We settled the case and were on the brink of regaining control of our finances after the NCLAT ruled in our favour.

However, the foreign distress lenders have been litigating against us and appealed this ruling in the Hon'ble Supreme Court. The apex court has issued a temporary stay on the NCLAT's decision, which means the control of the company's accounts has not yet been restored to us.

Hence, founders are unable to infuse more capital to pay salaries like we have always done over the past many months. Still, I want to assure you that we are doing everything possible to resolve this quickly. I have complete faith in the fairness of India's legal system.

I guarantee this: When we regain control, your salaries will be paid promptly, even if that means raising more personal debt. This isn't just a promise - it's a commitment. We have investors ready to back our turnaround story. They see what I see - enormous potential and inevitable growth.

Over the past 29 months, TLPL's only source of capital was the founders. Founders together have infused approximately INR 7,500 crore in the company for various operational needs. 

For us, it was a simple decision to make. Whatever we made, we made from this company with you, so we didn't hesitate even for a split second to reinvest our wealth for your collective well-being.

As a matter of fact, Out of the INR 3,976 crores disbursed as salaries to the team over the past two years, INR 1600 crores was infused by Riju personally. When was the last time you saw founders using their savings, even borrowings, to pay salaries for their beloved team members for more than two years?

Now I will share some hard facts that will dispel all false narratives being peddled against us and our company. 

Claims suggest that the funds used to settle Think and Learn (TLPL)'s obligations with the BCCI might be "tainted" or sourced improperly. My brother, Riju, has taken full financial responsibility for settling INR 158 crores with the BCCI. The funds used to discharge this obligation were sourced entirely from his finances, which were accumulated through the sale of his shares in BYJU'S between May 2015 and January 2022. These sales have been thoroughly documented, and the relevant income taxes have been paid as the law requires.

While the U.S. based distress lenders are alleging otherwise, not a single rupee used for the BCCI settlement is connected to the Term Loan B (TLB) raised in the US,  which in any event is restricted from entering India. The settlement was completed in full compliance with all legal requirements, and we have submitted it under oath to the court.  It clearly states that of the INR 3,600 crores he earned from secondary share sales, approximately INR 2,600 crores were reinvested into BYJU'S to sustain the company's operations, and INR 1,050 crores were paid as income tax. Today, Riju is left with limited savings. He even had to raise money against our house to clear some liabilities. 

More importantly, these are not the original lenders who gave us USD 1.2 billion TLB for expansion, which was to be repaid in November 2026. These aggressive foreign distress funds created enough noise, bought these bonds at a fraction of the original value, unlawfully accelerated the loan, and asked us to pay back in full within 16 months of disbursing the loan. It is important to note that, at the time they accelerated the debt, this alleged violation was not on account of any financial default but on account of technical defaults, such as Whitehat Junior's inability to give a guarantee due to a change in RBI regulation.Until they unlawfully accelerated the loan, we were paying interest and there was no financial default. We have challenged their acceleration, pending in the New York court, which is the exclusive jurisdiction to decide all disputes under the credit agreement.

I also want to emphasize that the ED investigation against BYJU'S is restricted solely to procedural deficiencies under FEMA, such as delay in filing Annual Performance Reports (APRs) with respect to duly compliant overseas investments arising from the delayed statutory audit. Contrary to what some media articles may have alleged, ED has not commenced any investigation against Riju or me in any personal capacity either.

Over the last several weeks, several accusatory labels have been made against us – including reckless and damaging allegations that we are 'fugitives'. As the leader of a company with a significant international presence, my work often demands that I be in different parts of the world, building relationships, securing partnerships, and driving our vision forward. I also had to be in the US for months at a stretch when my father was fighting a critical health condition. I have travelled to India 10 times since March 2023 and spent 77 days in total, while Riju was in India just two weeks ago to pledge our last personal asset. I have always been transparent about my whereabouts and activities, and there has never been an attempt to avoid legal or financial obligations.

In truth, BYJU'S has consistently championed the vision of 'Make in India for the World', embodying the spirit of Indian innovation and global ambition. Many investors urged us to shift our corporate structure to a foreign country to evade India's tax structure. Still, we made the conscious decision not to because this country has given us everything, and I wanted to show the world that Indians can dream big and succeed globally. Why would we choose to stay away if we weren't willing to save thousands of crores through complex tax structures?

Our company is on the verge of reversing the negative business cycle that began two years ago, showing clear signs of recovery. We are ready to launch BYJU'S 3.0, an AI-driven, hyper-personalized educational platform low on cost and high on impact. I want to remind all of you that we are still the largest edtech platform globally with 150 million students using our products and services every month. Despite the recent challenges faced,  this organic user base has doubled over the last two years. Indeed, BYJU'S is transitioning to a sustainable business model that serves millions of students across India and employs thousands of people.

BYJU'S is my home and my final destination. Everything I have done & will do is for our thousands of teachers and millions of students.

With immense regard & infinite gratitude

Byju Raveendran

Founder CEO