A US court on Tuesday held Riju Ravindran, brother of Byju Raveendran, in contempt of court for failing to “disclose or ascertain the location of the $533 million” that he transferred from Byju’s Alpha Inc, imposing a financial penalty on him.
Riju, one of the directors of Think & Learn Pvt. Ltd, oversaw the company’s US entity until 2023.
“The actions outlined in the declarations were tepid at best, identifying a few emails that were unanswered and a request for financials that resulted in stale information,” said Judge John T Dorsey, according to a statement issued by Byju’s lenders.
The judge further added that Riju’s defence of ‘I asked but no one either knows, or would tell me where the money is’ lacks credibility.
A person close to Byju's said on the condition of anonymity the order does not have a legal bearing and is "purely symbolic". Further, the person added that Riju's engagement should not be misconstrued as an admission of jurisdiction but rather a commitment to transparency.
Byju's has been involved in a legal tussle with its lenders over the fund for a year. Byju’s in November 2021 had secured $1.2 billion through a term loan from foreign lenders to fuel its inorganic growth plans and for working capital. The beleaguered edtech at one point was negotiating the repayment of the loan with lenders but the talks were later scrapped. The creditor moved to court accusing the edtech’s US entity of hiding over $500 million.
Once valued at $22 billion, the beleaguered edtech player saw its valuation cut by 99% when it decided to raise capital through a rights issue earlier this year.
“I conclude Mr. Ravindran’s testimony is not truthful, that he either knows where the funds are located, or is intentionally avoiding obtaining the information from other sources. I therefore find that he is in contempt of my previous order to provide the information,” the judge said.
The court earlier this year ordered the arrest of William Morton, founder of hedge fund Camshaft Capital Fund, where Byju’s Alpha transferred the proceeds of the loan initially, for his refusal to appear in court.
“Today’s ruling validates what we have known all along: Riju Ravindran, his brother and co-founder, Byju Raveendran, and their conspirators fraudulently transferred $533 million in loan proceeds for no legitimate purpose other than to hide the money from the lenders to whom it is rightfully owed,” the lenders said.
“With William Morton and now Riju found in contempt, the walls are closing in around Byju and his house of cards. We will continue to take all necessary legal actions to recover the stolen funds,” the lenders added.
