Byju Raveendran Ordered to Pay $1.07 Billion by US Court

A US bankruptcy court has ordered Byju Raveendran, the founder of Byju’s, to pay over $1.07 billion. This ruling holds him personally liable for the alleged movement and concealment of funds from Byju’s Alpha, the company’s financing arm based in the United States. The default judgment was issued by Judge Brendan Shannon of the Delaware Bankruptcy Court, following Raveendran’s repeated failure to comply with court orders to appear and provide necessary documentation.

The court’s decision to issue a default judgment occurs when a party neglects to participate in the litigation process, allowing the court to make determinations without a trial. Raveendran has denied all allegations, stating that he intends to appeal the judgment. In a public statement, he argued that the court expedited the proceedings, preventing him from presenting a defense.

Raveendran’s statement highlighted his belief that “the court ignored relevant facts” and emphasized the need for a proper defense. He indicated that the Delaware court’s ruling did not consider that GLAS Trust had knowledge that funds from Alpha loans were not utilized for personal gain by Raveendran or any other founder. Instead, these funds were used for the benefit of Think and Learn Private Limited (TLPL).

Byju’s Alpha was incorporated in Delaware in 2021 as a special-purpose vehicle to manage a $1.2 billion term loan from a consortium of global lenders. This subsidiary had no operational business and primarily served as a holding entity for the loan proceeds. Recent court filings revealed that $533 million was transferred from Alpha to Camshaft Capital, a small hedge fund located in Miami. Subsequently, these funds were moved through affiliated entities like Inspilearn and later routed to an offshore trust, without any returns to Byju’s Alpha.

The implications of this judgment extend beyond financial penalties, potentially affecting the operational stability of Byju’s, a major player in the global edtech market. As Raveendran prepares for an appeal, the outcome could have significant repercussions for the company’s future and its reputation in the industry.

The case underscores the complexities of financial management and accountability within large corporations, particularly in the rapidly evolving edtech sector. Stakeholders are closely monitoring the developments, as the final outcome may influence the broader landscape of business practices and regulatory scrutiny in the industry.