$533 million missing Alpha funds ‘roundtripped’ to CEO Byju Raveendran, alleges US court filing; Byju’s denies it
According to a recent filing in Delaware bankruptcy court, most of the $533 million lost in Byju’s Alpha was funneled “round trip” to founder Byju Raveendran and his affiliates; This contradicts earlier sworn claims that the funds were used for “legitimate corporate needs.”
Byju’s Alpha is a US-based special purpose vehicle founded by Raveendran and its affiliates.
The bankrupt Indian education technology firm used OCI Limited, a U.K.-based logistics company, to hide money from U.S. lenders, the court filing alleged.
“The truth of what happened to the missing $533 million in Alpha Funds has long remained an alarming mystery. But as part of the Settlement with the Debtor, OCI, the party that had ceded the vast majority of this money, agreed to come forward. The truth about what happened to the vast majority of the Alpha Funds is that they actually went back directly to Byju Raveendran and his affiliates.” live mint.
The claim was submitted to the court on November 15 by the plaintiff and debtor Byju’s Alpha and the intervener-plaintiff GLAS Trust Company.
However, Byju issued a press statement on November 18 denying all these allegations.
Where is the missing money?
In an affidavit, OCI Limited founder Oliver Chapman revealed details of what happened to the Alpha funds as part of a proposed settlement in a case alleging the firm helped Byju hide the money.
Raveendran had repeatedly claimed that the money would be used to supply services and equipment to Byju’s, whose parent company is Think and Learn Pvt Ltd. But the majority of the money was transferred to a Singapore-based corporate entity called Byju’s Global, which is individually owned by Raveendran, Chapman said in his affidavit.
“This shows that Raveendran’s plan was to siphon off hundreds of millions of dollars of company assets for personal use,” the statement said.
OCI also alleged that former advisor Rupin Banker, in coordination with Raveendran, misused the logistics company to facilitate a scam aimed at preventing lenders from recovering money.
Now that Chapman has come forward to give lenders details about what happened to the cash, the lender-backed lawsuit and a related lawsuit would hold Banker and Raveendran responsible for the missing money.
Byju faces multiple lawsuits
In October last year, Raveendran confirmed that $533 million would not be available to edtech term loan B lenders and said it was earmarked for future spending; This differed from his previous claim that the money was kept safe abroad. Mint It was previously reported.
Byju’s is facing multiple lawsuits filed by lenders and investors. Lenders demanded repayment of the $1.2 billion loan he received in November 2021. As investors seek to protect their rights in the company’s parent Think & Learn, some, including the Qatar Investment Authority, have sought a court order to obtain details of Raveendran’s personal assets.
Bengaluru-based Byju has been under scrutiny by US lenders for over two years as it has been pushing for repayment of a $1.2 billion loan raised in November 2021. As a result, the lenders took control of the US shell company, which borrowed the money and distributed the funds to Byju’s operating entities in India and elsewhere.
Last year, lenders took over the shell company Byju’s Alpha and put it into Chapter 11 bankruptcy. Three other units were forced into bankruptcy and placed under the control of bankruptcy attorney Claudia Springer. At the same time, Byju’s was also pushed into bankruptcy.
Byju denied the allegations
The company contested all claims filed in the Delaware Court against CEO Byju Raveendran and his partners.
“This application to the Delaware Court does not address the fact that GLAS Trust was aware that the monies from the Alpha loans were not used by Byju Raveendran or any of the Founders of BYJU for their personal gain but were used for the benefit of Think & Learn Private Limited (TLPL),” the company said in the press release.
The company also stated that it has the right to file a lawsuit against OCI and its manager for the loss suffered by Byju due to the allegations.
