Trustees of Byju’s Alpha Inc have filed a lawsuit in the Delaware bankruptcy court against Byju’s co-founder Byju Raveendran, his wife Divya Gokulnath, and senior executive Anita Kishore, alleging misappropriation of $533 million from a term loan facility. The suit accuses the trio of orchestrating a complex scheme to divert funds and obscure their trail from creditors.
Byju’s Alpha Inc, a special-purpose vehicle established in 2021 to receive proceeds from a $1.2-billion term loan B (TLB) facility, reportedly defaulted by 2022. According to the complaint, in mid-2022, $533 million, referred to as the Alpha Funds, was transferred from Byju’s Alpha to Camshaft Capital Fund LP in exchange for a limited partnership interest. The hedge fund, based in Delaware, was previously flagged by the court as dubious, with its listed headquarters traced to a pancake restaurant.
Responding to the lawsuit, Byju’s founders in a statement, rejected the allegations as “completely baseless and untrue,” describing the case as part of a “conspiracy” to seize control of the company. They cited a “signed and verified affidavit” submitted to court, claiming it transparently accounts for the use of the entire $1.2-billion loan.
The filing further alleges that after lenders took control of Byju’s Alpha through their agent Glas Trust on March 3, 2023, the defendants transferred the Camshaft interest, then valued at $540.6 million, to Inspilearn LLC, an affiliate of Byju’s that was not a guarantor to the loan. This transfer occurred on March 31, 2023, for no consideration.
The lawsuit claims that on February 1, 2024, the same day Byju’s Alpha filed for Chapter 11 bankruptcy, the asset was moved from Inspilearn to an offshore trust, which then redeemed it, rendering the current status and location of the funds unknown.
The suit builds on earlier court findings of fraudulent conduct involving Raveendran, Camshaft Capital, and Think & Learn, Byju’s Indian parent company. It seeks damages and a full accounting of the diverted funds, citing six charges including breach of fiduciary duty and civil conspiracy.