A US bankruptcy court has ruled against Byju’s Alpha, Inc and its affiliates in a case involving the fraudulent transfer of $533 million. Judge John T Dorsey of the Delaware Bankruptcy Court issued a summary judgment against key defendants, including Riju Raveendran, Camshaft Capital Fund, LP, and Think & Learn (T&L), which operates as Byju’s.
According to press release issued by the lenders, the court found that the defendants orchestrated and executed a fraudulent scheme to misappropriate funds loaned to Byju’s Alpha, a Delaware-based special purpose financing vehicle established by Byju’. Judge Dorsey confirmed that multiple transfers of funds from Byju’s Alpha were fraudulent and that Riju Raveendran violated his fiduciary duties as a director of Byju’s Alpha. Damages will be determined at a later date.
The court determined that shortly after securing a $1.5 billion Term Loan B in 2021, Byju’s Alpha defaulted on loan covenants in early 2022. Almost immediately, funds were transferred through a series of transactions designed to obscure their final destination.
Judge Dorsey highlighted that the defendants actively concealed the movement of funds, failed to provide financial statements, refused basic information requests, and misled creditors. A critical finding was that Byju Raveendran, CEO of Byju’s, allegedly told financial advisors that the funds were hidden beyond the reach of lenders.
“We are gratified the Court unequivocally recognised that Riju Raveendran, Camshaft, and Byju’s conducted a deliberate fraud on a global scale arising from the theft of $533 million,” the lenders’ steering committee stated. “This is a significant step forward in recovering the stolen funds.”
The court ruled that Think & Learn played a central role in the fraudulent transfers by creating a US subsidiary specifically to facilitate the scheme. The company misled lenders into believing that the funds remained in Byju’s Alpha’s accounts. Judge Dorsey stated that T&L had no authority to transfer funds, making the transactions legally invalid.
The court also found that Camshaft Capital Fund, the recipient of the funds, was a sham hedge fund established by William Morton. The hedge fund’s involvement raised serious concerns about the legitimacy of Byju’s investment decisions.
Byju’s Alpha was formed in 2021 to receive and manage proceeds from the Term Loan. In 2022, $533 million was transferred from Byju’s Alpha to Camshaft Capital Fund, LP, then funneled through multiple entities, including Inspilearn LLC,
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