US court says Byju’s defrauded lenders

MUMBAI/BENGALURU : A US bankruptcy court has found Byju’s parent Think & Learn, Byju Raveendran’s brother Riju Ravindran and a little known hedge fund Camshaft Capital responsible for defrauding Byju’s term loan lenders.

The court also observed that Ravindran violated his fiduciary duties as a director of Byju’s Alpha, a US subsidiary set up by the startup to receive the term loan proceeds which was eventually placed under the control of the lenders. “In making its ruling, the Court confirmed that the multiple transfers of funds from BYJU’s Alpha constituted actual fraudulent transfers and conversion (i.e., theft),” the lenders said in a statement late Friday.

The case pertains to the lenders’ efforts to recover the missing $533 million, a portion of the loan amount they had extended the startup as part of the $1.2 billion term loan proceeds. The lenders have repeatedly accused the startup and Ravindran of hiding the money and refusing to disclose the whereabouts of the funds, seeking legal intervention to locate the same. “We are gratified the Court unequivocally recognized that Riju Ravindran, Camshaft, and BYJU’s together conducted a deliberate fraud on a global scale arising from the theft of $533 million. This is a significant step forward in the Lenders’ efforts to recover the stolen funds that are rightfully owed to them,” the lenders said.

Byju’s Alpha, while under the control of the Raveendran family, had initially appointed Camshaft Capital to manage the funds. They were subsequently transferred to Inspilearn, another US subsidiary of the startup and moved further to what the lenders claim is a “still undisclosed entity.”

The development came hours after Byju Raveendran took to social media platform LinkedIn alleging misconduct in the company’s insolvency proceedings. He later deleted the post a few hours after publishing it. Raveendran expressed his determination to prevent the company from entering corporate insolvency resolution proceedings (CIRP), stating, “those who come from nothing are never scared of anything.” He further alleged the existence of “conclusive evidence of criminal collusion” between EY India, GLAS Trust, and the interim resolution professional (IRP) handling the case.

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