Another blow to Byju Raveendran! US court orders him to pay $1 billion after default ruling

A US bankruptcy court has ordered Byju’s founder Byju Raveendran to personally pay more than $1.07 billion, holding him liable for allegedly moving and concealing funds from Byju’s Alpha, the company’s US-based financing arm.

The ruling, issued by Judge Brendan Shannon of the Delaware Bankruptcy Court, came after Raveendran repeatedly failed to appear before the court or provide required documents, IANS reported, citing multiple media reports. As Raveendran failed to participate in the proceedings, the court issued a default judgment, which allows a case to be decided without a trial.

Appeal and denial from Raveendran

On the other hand, Raveendran has denied all allegations and said he will appeal the ruling, calling the judgment rushed and unfair.

He said, “The Court, in our view, ignored relevant facts. Byju Raveendran must be allowed to present a defence and has been denied the right to do so by expediting the trial.” He further added that the lenders were aware the funds were not used for personal reasons.

“The Delaware Court Judgement also does not address the fact that GLAS Trust has been aware that the monies from the Alpha loans were not used by Byju Raveendran or any Founder of BYJU’s for their personal gain but were used for the benefit of Think & Learn Private Limited (TLPL).”

Byju’s Alpha was created in Delaware in 2021 as a special-purpose vehicle to receive the $1.2 billion loan from global lenders. It had no operational business and mainly functioned as a holding company for the loan.

Court documents show that $533 million was transferred from Alpha to Camshaft Capital, a small hedge fund in Miami, and then moved through linked entities such as Inspilearn before ending up in an offshore trust. None of the funds were returned to Alpha, raising concerns about diversion.

After Raveendran defaulted on repayment, Byju’s Alpha came under lender control, leading to accusations of round-tripping almost half the loan amount.

The controversy grew after Oliver Chapman, founder of UK-based OCI, submitted a sworn declaration claiming that the diversion of $533 million was facilitated through his firm. Chapman alleged that the funds were not used for advertising, marketing services, or tablets as claimed, but were instead transferred to a Singapore entity called Byju’s Global Pte Ltd, owned by Raveendran. He suggested this may indicate personal use of the funds.

In India, Think & Learn Pvt Ltd (TLPL) is currently undergoing insolvency proceedings that began last year after the Board of Control for Cricket in India approached the National Company Law Tribunal (NCLT) to recover Rs 158 crore owed to it for a sponsorship agreement. As part of the process, TLPL’s resolution professional has begun the sale of Byju’s assets. These include the coaching centre chain Aakash and business units such as GeoGebra, WhiteHat Jr, and Toppr.

The assets up for sale also cover inventory, receivables, fixtures, furniture, the Byju’s Learning app, along with other intangible assets and course material. Higher education and upskilling firm Upgrad, as well as Ranjan Pai’s Manipal Group, have submitted expressions of interest to acquire TLPL or parts of its assets.

At the core of the dispute is the allegation that $533 million, part of the $1.2 billion loan meant for Byju’s Alpha, was diverted through OCI and eventually moved to a Singapore entity allegedly linked to Raveendran. While Byju’s Alpha—now controlled by creditors—claims the funds were misused and is seeking a settlement with OCI, Raveendran maintains the money was used for Think & Learn’s operations and not for personal benefit.