US Court Finds Byju Raveendran, Think & Learn Guilty of $533 Million Fraud
US Court Finds Byju Raveendran, Think & Learn, and Others Guilty of Fraud in $533 Million Case
In a significant legal development, the US Bankruptcy Court for the District of Delaware has ruled against Byju Raveendran, founder of edtech giant Byju’s, and several associated entities in a case involving large-scale financial misconduct. The court found Byju Raveendran, suspended director Riju Ravindran, Think & Learn—the parent company of Byju’s—and hedge fund Camshaft Capital Fund guilty of defrauding Byju’s US entity, Byju’s Alpha Inc, and its lenders.
Fraudulent Fund Transfers and Financial Misconduct
According to a statement released by the lenders, the court determined that multiple fund transfers from Byju’s Alpha were fraudulent, amounting to theft. The court also held that Riju Ravindran had violated his fiduciary duties as a director of Byju’s Alpha by participating in these financial irregularities.
The steering committee of the ad hoc group of term loan lenders to Byju’s Alpha Inc expressed satisfaction with the ruling, emphasizing that the court’s findings highlight deliberate fraudulent activities on a global scale. “We are gratified that 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 committee stated.
Jurisdiction and Concealment of Funds
The judge overseeing the case ruled that Think & Learn had deliberately established a US subsidiary to commit fraud, thereby making it subject to US jurisdiction. The ruling further stated that Byju’s and its founders repeatedly concealed the location of the Alpha Funds and failed to provide the necessary financial records. Lenders had repeatedly requested financial statements detailing the transfers, but these requests were ignored, further strengthening the case against the company.
Parallel Legal Proceedings in India
While the case unfolds in the US, Byju’s is also facing legal challenges in India. The US lenders, represented by Glas Trust, have taken legal action against Think & Learn before India’s National Company Law Tribunal (NCLT). On January 29, the NCLT allowed Glas Trust and Aditya Birla Finance to be inducted into the committee of creditors for Think & Learn, signaling further complications for the embattled edtech company.
Byju’s Alpha Bankruptcy and the Missing $533 Million
Byju’s Alpha Inc filed for bankruptcy in February after defaulting on its debts. During efforts to recover funds, lenders discovered that Byju’s had transferred $533 million to hedge fund Camshaft Capital, operated by William Cameron Morton. The fund, described in court filings as “unknown and unproven,” raised further suspicions due to Morton’s limited financial background. The lawsuit against Morton and Camshaft Capital alleges that Byju’s has failed to provide a legitimate explanation for the massive transfer of funds.
Adding to the severity of the situation, a previous court ruling had ordered Riju Ravindran to pay $10,000 per day until he cooperates in locating the missing $533 million.
As legal proceedings continue in both the US and India, Byju’s, its leadership, and its financial practices are under intense scrutiny. The case has raised concerns about corporate governance, financial transparency, and regulatory oversight in the global edtech sector.
