Byju’s Alpha, the Delaware-based special purpose finance vehicle of the embattled Indian edtech company Byju's, has filed a lawsuit against the company’s founder Byju Raveendran, co-founder and wife Divya Gokulnath, and senior executive Anita Kishore.
The suit alleges that the trio orchestrated a fraudulent scheme--described as a “web of deception”--to misappropriate $533 million (Rs 4,600 crore) in loan proceeds that Byju’s Alpha was intended to receive, thereby defrauding its lenders.
According to a statement from the term loan lenders, Raveendran, Gokulnath and Kishore were involved in illegally transferring loan funds, misrepresenting financial information, and obstructing lenders from exercising their legal rights.
The lawsuit follows a recent Delaware Bankruptcy Court ruling, which found Raveendran’s brother Riju Raveendran, hedge fund Camshaft Capital, and Byju’s parent entity Think & Learn responsible for defrauding Byju’s Alpha and its lenders in connection with the same $533 million.
“It is clear that Byju, Divya, and Anita deliberately hid the assets of BYJU’s Alpha and repeatedly were deceptive about the location of the money in order to steal funds rightfully owed to the Lenders,” the group of term loan lenders of Byju’s Alpha said in the statement. “In light of the Court’s recent decision, there can be no doubt that they acted unlawfully and tried to cover their tracks, breaching fiduciary duties and making numerous misrepresentations, among other misconduct, in the process.”
Through the lawsuit, Byju’s Alpha is seeking damages for breaches of fiduciary duty, a full accounting of the Alpha funds, and reimbursement of legal fees, costs, and other related expenses.
Once valued at $22 billion, Byju’s is facing insolvency proceedings.
The controversy began when Byju’s Alpha defaulted on its credit agreement in March 2022, just months after receiving the term loan. The funds were later transferred to various entities, including a sham hedge fund with no investment record, and a listed address that matched a pancake restaurant.
