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Economic Times
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Byju’s founder says missing millions went to legitimate purpose
- Byju Raveendran, the founder of Byju’s, has denied orchestrating a scheme to fraudulently transfer $533m away from lenders. On the day a judge was set to consider the lenders’ fraudulent transfer claims against his company, Raveendran outlined, for the first time in court, his explanation for what happened to the money. The $533m – which lenders allege was transferred offshore to entities linked to Raveendran – was used for a “legitimate commercial purpose,” Raveendran argued.
- Byju’s received a $1.2bn loan nearly three years ago as it planned to use most of the proceeds on international expansion.
- When Byju’s was unable to reimburse what it owed, a UK-incorporated firm – OCI – provided procurement services for IT equipment and advertising. OCI exercised its “right of set-off” against the Alpha Funds.
- “Neither I, nor any of the founders of T&L (the borrowing unit of Byju’s) has personally received any portion of the Alpha Funds or any of the funds disbursed under the credit agreement,” Raveendran said in the filing.
- The US bankruptcy case is BYJU’s Alpha Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington).
- Lenders have long believed that the so-called Alpha Funds represented their best chance of recovering some of the $1.2bn they lent Byju’s.
- The two sides have been fighting in state and federal courts over what happened to the money for more than a year.
- Raveendran claimed the claims of fraud and siphoning of money against him were based on one statement attributed to him and that he never said that the lenders would never find the money.
- The funds, he said, were to be used for their intended purpose, international expansion.
- The $533m that lenders are trying to track down was used for a “legitimate commercial purpose,” according to Raveendran.
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