US Court bars BYJU’S from transferring $533 million loan 

Court finds Indian edtech company founder Byju Raveendran and co-founder Divya Gokulnath collaborating with defendants

A US court has barred BYJU’S, a leading Indian multinational educational technology company, from further transfer or use of the $533 million in loan proceeds.

Judge John T. Dorsey of the US Bankruptcy Court for the District of Delaware granted a preliminary injunction, alongside ordering the arrest of William Morton, Founder of Camshaft Capital Fund, LP.

The court found BYJU’S Founder Byju Raveendran and Co-founder Divya Gokulnath were collaborating with the defendants — Riju Ravindran, Inspilearn LLC, and Camshaft Capital Fund, LP and its affiliates — and mandated their compliance with the ruling.

“I’m still very upset about the fact that [the Defendants] are obfuscating where this money is,” Dorsey stated, according to the steering committee of the ad hoc group of term loan lenders of BYJU’S $1.2 billion term loan B (TLB).

READ: Mark Zuckerberg’s philanthropic arm invests $50 million in Bengaluru-based Byju’s (September 9, 2016)

In 2021, BYJU’s Alpha, Inc., a US subsidiary of BYJU’S, received funds from the $1.2 billion TLB. Under Ravindran’s control in 2022, BYJU’S Alpha transferred $533 million of the loan proceeds to Camshaft Capital Fund, LP, established by Morton.

The court issued an arrest order for Morton after he failed to appear and furnish requested information regarding the transfer and present status of the funds, with a daily fine of $10,000 until compliance.

“This ruling confirms that Byju Raveendran himself is acting in concert with… his brother, Riju, his wife, Divya, and fugitive William Morton,” said the SteerCo, emphasizing the importance of freezing assets towards recovering the missing $533 million.

The ongoing TLB dispute, involving the $533 million, represents one of many challenges facing the edtech company. In January, lenders of BYJU’S lodged an insolvency petition against the firm with the National Company Law Tribunal (NCLT).

In India, the company is entangled in a dispute with its shareholders, with resolutions passed during an extraordinary general meeting (EGM) in February, subsequently stayed by the Karnataka High Court.

Additionally, a group of four investors filed a lawsuit accusing the company’s management of oppression and mismanagement before the Bengaluru bench of the NCLT.