BYJU'S Alpha Sues Byju Raveendran Over Alleged 'Misappropriation' Of $533 Mn

BYJU’S Alpha, the US-based special purpose finance vehicle of BYJU’S, has sued the edtech startup’s founder Byju Raveendran, his wife and cofounder Divya Gokulnath and advisor Anita Kishore for allegedly ‘misappropriating’ $533 Mn in funds.

The lawsuit alleged that the three orchestrated and executed a lawless scheme to conceal and steal $533 Mn of loan proceeds.

This comes after the of the $1.2 Bn term loan B extended to the startup.

“On the heels of the Delaware Bankruptcy Court’s recent judgment against his brother and companies, this action is being brought to now hold Byju Raveendran and two more of his coconspirators, cofounder and close business associate, accountable for their roles in masterminding the theft of more than half a billion dollars,” lenders of BYJU’s Alpha’s Term Loan said in a statement.

The lenders further pointed out that it is clear that Byju, Divya, and Anita deliberately hid the assets of BYJU’s Alpha and repeatedly were deceptive about the location of the money to steal funds rightfully owed to the lenders.

Meanwhile, BYJU’S founders dismissed the allegations by lenders as “baseless and untrue”.

The founders accused lenders of conspiring to take control of BYJU’S through ‘nefarious means’, including filing lawsuits and using media narratives. It also accused lenders and EY India of collusion in sabotaging BYJU’S insolvency process in India.

On the financial transparency, BYJU’s founders said,” A signed and verified affidavit that we submitted in the court of Delaware has the details of how the entire $1.2 Bn loan was spent, to the last dollar. And yet, that affidavit was conveniently ignored, and GLAS has continued to raise the question of the so-called missing $533 Mn repeatedly to mislead.”

BYJU’s Alpha was established to manage proceeds from the Term Loan B. The company defaulted on its credit agreement in early 2022, just months after receiving the loan.

This was followed by a series of alleged 11 fraudulent transfers totaling $533 Mn, made by BYJU’S Alpha (then under BYJU’S parent Think & Learn Pvt Ltd.), as per the lenders.

The funds were allegedly moved to the Camshaft Capital Fund, a hedge fund, and were later transferred through various entities, including Inspilearn LLC and an offshore trust.

The development comes at a time when the ongoing insolvency proceedings against.

Earlier this month,of “criminal collusion” in the insolvency process.

He called for a government investigation into alleged conflicts of interest, particularly regarding EY India’s dual role as an advisor to lenders and involvement in the insolvency process.

After the allegation of misconduct against Srivastava, Shailendra Ajmera from EY India has been appointed as the new Resolution Professional (RP) by the NCLT.

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