Karnataka High Court Stops Byju’s From Selling Assets In $235 Million Qatar Fund Dispute

The troubles for embattled edtech company Byju’s deepened on Tuesday as the Karnataka High Court ordered the company and its founder, Byju Raveendran, not to sell or transfer any of their properties until further notice.

The order comes in response to a petition filed by the Qatar Investment Authority, which has accused Byju’s of defaulting on a massive loan and is seeking to recover more than $235 million.

The case goes back to 2022, when the Qatar Investment Authority, through its subsidiary Qatar Holdings LLC, lent $150 million to Byju’s Investment Private Limited, a group company of the edtech giant.

That loan was personally guaranteed by Byju Raveendran. After disputes arose over repayment, the matter was taken to the Singapore International Arbitration Centre (SIAC). In that proceeding, the arbitral tribunal granted partial relief to Qatar Holdings, awarding them $235 million along with interest.

However, the fund has struggled to enforce this award in India. Earlier this year, in April, its request to stop Byju’s from selling assets was turned down by the High Court on technical grounds.

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At that time, the court said such a restraint could have been sought from the Singapore tribunal itself. Now, in a fresh petition, Qatar Holdings has once again asked for enforcement of the arbitral award in India.

On Monday, a bench of Justice R Nataraj granted interim relief to the sovereign wealth fund by barring Byju’s and its founder from disposing of or alienating any of the properties listed in the petition.

This means that until the case is heard further, Byju’s cannot sell, transfer, or otherwise deal with the assets named in the petition. The court will continue hearing the matter on Wednesday.

The Qatar Investment Authority has not only demanded enforcement of the $235 million arbitral award but also asked the court to order full disclosure of all assets held by Byju’s and its founder, including their value and location.

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In addition, it has sought attachment of these properties, appointment of a receiver to sell them, and use of the proceeds to satisfy the award. The petition further demands interest at an annual compounding rate of 4 per cent from February 28, 2024, until payment is made.

Byju’s counsel, meanwhile, has asked the court for more time to file objections, stating that they have not yet received a copy of the petition. The case will now return for further hearing mid-week, when the court will decide whether to extend or modify the interim relief granted to Qatar Holdings.

The ruling adds to the growing list of legal and financial troubles surrounding Byju’s, once celebrated as India’s most valuable startup. In recent months, the company has faced investor lawsuits, auditor exits, and mounting pressure from creditors after a sharp decline in its valuation.