Byju’s ex-director fined $10,000 per day over missing $533 million
The missing money is at the heart of a dispute between lenders owed $1.2 billion and the startup founded by entrepreneur Byju Raveendran. (Photo: Bloomberg)
By Steven Church
A suspended director of the troubled Indian educational tech firm Byju’s must pay $10,000 a day until he helps locate $533 million that his company is accused of hiding from US lenders, a judge said Wednesday.
Riju Ravindran, brother of Byju’s founder, has been at the center of a nearly two-year-old fight over the missing cash, which lenders say should be returned to them after the company defaulted. Ravindran is one of three directors of Think & Learn Pvt. — which operates the Byju’s brand — who were recently replaced by a trustee as part of an involuntary bankruptcy case filed in India, according to US court documents.
After imposing the sanctions on Ravindran, US Bankruptcy Judge Brendan Shannon also rejected a request to put the US debt fight on hold so Ravindran and the company could find new lawyers. American lawyers for Ravindran and Byju’s units want to quit defending their clients in the bankruptcy dispute, blaming “an irreparable breakdown.”
Instead, Shannon ruled that Ravindran’s lawyers must continue to represent their clients until at least a hearing next month, when all sides return to US Bankruptcy Court in Wilmington, Delaware, where much of the conflict has been playing out.
The moves are the latest twists to an usual saga involving a company that was once a symbol of India’s rising technology sector. Within 18 months of borrowing $1.2 billion from US lenders in 2022, Byju’s missed key financial reporting deadlines, had their offices raided by Indian regulators and was accused by American lenders of defaulting.
Since then, the company has been accused of fraudulently transferring $533 million away from a shell company set up in the US that was responsible for paying the debt. Byju’s has defended its actions by claiming it has been targeted by predatory lenders.
The missing money is at the heart of a dispute between lenders owed $1.2 billion and the startup founded by entrepreneur Byju Raveendran.
The missing cash belongs to a bankrupt shell company, Byju’s Alpha Inc., which is affiliated with Think & Learn and was taken over by the lenders after their loan defaulted.
The US bankruptcy case is BYJU’s Alpha Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington).
First Published: Aug 01 2024 | 8:16 AM IST