Byju’s lender group says US court ordered freezing $533 million

Members of a consortium that lent $1.2 billion to Byju’s said a US bankruptcy court prohibited the edtech firm from further transferring or utilising $533 million from the loan proceeds that it had held with a hedge fund but now moved to an unnamed offshore trust.

Judge John T Dorsey on Thursday also ordered the arrest of William Morton, founder of hedge fund Camshaft Capital, after his repeated refusal to appear in court and provide information on the transfer of the money, they said.

The Delaware bankruptcy court, according to a statement from the lenders on Friday, found that the edtech firm’s founders, Byju Raveendran and Divya Gokulnath, were working in concert with Byju's Alpha and ordered them to comply with its ruling.


Byju’s had parked $533 million from the term loan in Byju's Alpha, a US subsidiary of its parent Think & Learn Pvt Ltd, before the money was allegedly transferred to the hedge fund. Byju's Alpha is now undergoing bankruptcy proceedings in the US.

Byju’s, responding to the lender group’s claim, said the order “merely maintains the status quo”. The company has always maintained that the funds are safely parked in one of its subsidiaries and, as per the order, it will rightfully remain there, the company said in a news release.

“It is now clear that this so-called ad hoc group is working in cohort with certain large investors of Byju’s to exploit the situation and make windfall gains. This cartel has selectively released some remarks made by the presiding judge to build fake narratives in the media,” Byju’s said, adding that it will continue to fight this “falsehood”.

“This ruling confirms that Byju Raveendran himself is acting in concert with, among others, his brother, Riju (Ravindran), his wife, Divya, and fugitive William Morton, and that these individuals are continuing to intentionally defraud Byju’s lenders,” the lender group said in its statement.

“The court-ordered freezing of assets is an important step towards recovering the missing $533 million, and we will take all necessary legal actions to recover what we are rightfully owed,” the group said.

The lender group said Byju is not the “victim he purports to be”, but is “the architect of a scheme that has vaporised tens of billions of dollars in value in what was once a great Indian company”.

“We call on Byju (Raveendran) to accept the will of Think & Learn’s shareholders and immediately step down as CEO and director to prevent further harm to the company’s employees, students and their families, and India’s credibility among the global investment community,” the statement added.

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Byju’s and the lender group have been trying to resolve the matter for about a year now after the latter recalled the full loan following alleged breach of terms by the edtech firm, including a delay in furnishing audited financial results for fiscal years 2022 and 2022.

Byju’s has been trying to sell group assets like Epic and Great Learning to clear the loan.

It is also in the middle of a battle with a group of investors who have moved court to block the company’s $200 million rights issue as well as change the board of the firm and remove Raveendran as CEO.