Setbacks For Byju's As AWS, Vodafone Idea Suspend Services Over Unpaid Dues
Cloud service disruptions and insolvency woes deepen as Byju's struggles with creditor disputes and operational challenges
Troubled edtech firm Byju's, which is currently undergoing insolvency proceedings, faces further setbacks as Amazon Web Services (AWS) and Vodafone Idea have suspended their services due to unpaid dues. AWS had been providing cloud services, while Vodafone Idea served as Byju's sole mobile network provider.
The suspension has reportedly led to frequent crashes of Byju's mobile app and inaccessibility of its common contact number since early September. While the website remains operational, server-related issues have become more frequent. Internal sources reveal that operations at Byju's have largely come to a halt, with many employees leaving the company, and others actively seeking new jobs.
In response to these reports, Byju's denied the suspension of services, claiming that its app and website remain fully functional and that the company has moved its databases to Google Cloud. However, neither AWS nor Vodafone Idea was available for comment.
This is not the first instance of Byju's facing difficulties with vendor payments. In August last year, the company experienced temporary disruptions when employees lost access to key data management tools like Salesforce, Tableau, and ToolJet.
The unpaid dues issue coincides with an ongoing dispute between Byju's and its US-based creditor, Glas Trust Company LLC, over a USD 1.2 billion loan taken in 2021. Byju's founder and CEO, Byju Raveendran, has claimed that the company's verified debt amounts to only Rs 20 crore, asserting that Byju's may not be obligated to repay the US lenders. Glas Trust, however, refuted these claims, stating that Byju's is required to repay the full loan, along with interest, and that no payments have been made for over 17 months.
On Tuesday, the matter was brought before the Supreme Court, where Glas Trust contended that it had been wrongfully removed from the committee of creditors (CoC) by the interim resolution professional (IRP) overseeing Byju's insolvency proceedings. Senior advocate Kapil Sibal, representing Glas Trust, argued that the lender, which holds a 99.41 per cent stake in Byju's, had seen its stake reduced to zero under the IRP's actions. The hearing continues before a bench led by Chief Justice D Y Chandrachud.
