Did Byju Raveendran steal money from his company?
What's the story
A recent filing in the Delaware Bankruptcy Court has alleged that $533 million is missing from BYJU'S Alpha, an entity now controlled by BYJU'S Term Loan B lenders. The document claims that the money was "in effect, roundtripped right back to Byju Raveendran and his affiliates." The allegation comes as BYJU'S Alpha seeks approval of a settlement with OCI Limited, a UK-based procurement firm that received most of the disputed funds.
Settlement specifics
Settlement details and allegations of misuse
As part of the settlement with OCI Limited, its founder Oliver Chapman submitted a sworn declaration detailing what happened to the Alpha Funds after OCI received them. The filing alleges that these funds weren't used for "legitimate commercial purposes" or to procure goods and services for Think & Learn, BYJU'S parent company. Raveendran had previously claimed in an unsolicited sworn declaration filed with the court that this money was sent to OCI for such purposes.
Enrichment claims
Allegations of clandestine removal and personal enrichment
The court filing alleges that in 2022, $533 million was secretly removed with the intent of transferring most of it to a corporate vehicle in Singapore, BYJU'S Global Pte Ltd, owned by Raveendran. This act is seen as evidence of personal enrichment. The document also claims that a former OCI representative, Rupin Banker, along with Raveendran and others, misused OCI to commit fraud against the debtor and its creditors.
Rebuttal preparation
BYJU'S denies allegations and prepares rebuttal
In response to the allegations, the founders of BYJU'S have issued a media statement denying any wrongdoing. They said that they reject GLAS Trust's latest filing in Delaware proceedings, which relies heavily on Chapman's selective and incomplete declaration. The founders emphasized that no part of the disputed $533 million has been used by them directly or indirectly. They also said their upcoming filing will provide evidence countering every assertion made in GLAS Trust's recent submission.
Financial woes
BYJU'S financial struggles and insolvency proceedings
BYJU'S has been embroiled in financial, legal, and operational crises since its aggressive global expansion. In November 2021, the company raised $1.2 billion Term Loan B through BYJU'S Alpha to fund international acquisitions and rapid scaling. However, by mid-2023, lenders alleged major breaches of the credit agreement and claimed some $500 million was missing from BYJU'S Alpha. US lenders moved to enforce their rights under the loan agreement and in November 2023, a Delaware court ruled in favor of this bid.