New York: A bankruptcy court in the US on Friday issued a summary judgement against Riju Ravindran, Think & Learn (the parent company of Byju’s), and the hedge fund Camshaft Capital, finding them guilty of fraudulent transfer of $533 million and a “breach of fiduciary duty.”
The Delaware Bankruptcy Court has issued a ruling, declaring that multiple fund transfers from Byju's Alpha, the US subsidiary of the embattled edtech company Byju's, constitute actual fraudulent transfers and conversion.
The court also confirmed that Riju Ravindran (brother of Byju Raveendran) violated his fiduciary duties as a director of Byju’s Alpha.
“We are gratified the court unequivocally recognised that Riju Ravindran, Camshaft, and Byju's together conducted a deliberate fraud on a global scale arising from the theft of $533 million. This is a significant step forward in the lenders’ efforts to recover the stolen funds that are rightfully owed to them,” the lenders said in a statement.
The court's ruling was made in response to a lawsuit filed in February of last year by Byju's lenders, who were represented by Glas Trust LLC.
Byju's Alpha, a special purpose financial entity, was established to secure a $1.2 billion five-year term loan from Glas Trust in November 2021. However, Byju's Alpha failed to meet its loan obligations, defaulting in March 2022, and was placed under trusteeship in March 2023.
The $1.2 billion loan was provided to Byju’s by a syndicate of 37 financial institutions.
Lenders allege that in 2022, Byju's Alpha, then under the control of the Raveendran family, transferred approximately $533 million in term loan proceeds to Camshaft Capital Fund, a hedge fund founded by William Morton. This transaction occurred prior to the Raveendran brothers' removal as directors and officers of Byju's Alpha on March 3, 2023.
“In March 2023, Byju’s Alpha’s limited partnership interest in Camshaft Capital Fund was transferred by Riju and Byju to Inspilearn LLC, and then again transferred to, and then redeemed by an offshore trust of Inspilearn in February 2024. Subsequently, there was yet another transfer to a still undisclosed entity,” according to the lenders.
inputs from IANS