Byju’s US lenders sue founder, wife, top aide over missing cash

Byju Raveendran (Courtesy: Bloomberg photo)

American lenders sued controversial Indian tech entrepreneur Byju Raveendran and his wife in a US bankruptcy court, seeking to hold them personally responsible for more than $500 million in missing loan proceeds.

In a complaint filed Wednesday in Wilmington, Delaware, the lenders repeated many of their previous allegations against Raveendran and the bankrupt education-tech company he founded in India. Two US bankruptcy judges have largely sided with the lenders, finding recently that Raveendran’s brother and the company, Think & Learn, better known simply as Byju’s, violated their fiduciary duties by wrongly transferring $533 million away from creditors.

The new lawsuit seeks to hold Raveendran, his wife, Divya Gokulnath and another top company official liable for their roles in the long-running dispute. The lenders have been trying for years to collect money on a defaulted $1.2 billion loan.

Byju’s fraudulently transferred at least part of the money to a small hedge fund based in Miami to keep it out of lenders’ hands, US Bankruptcy Judge John Dorsey ruled in February.

“In light of the court’s recent decision, there can be no doubt that they acted unlawfully and tried to cover their tracks,” lenders said in an emailed statement.

Raveendran and Gokulnath denied wrongdoing and accused lenders of trying to take over the business the couple founded, in an emailed statement.

The lender claims “are completely baseless and untrue,” according to the statement. “This lawsuit is a part of their conspiracy to wrestle control of Byju’s through all possible nefarious means.”

Byju’s is navigating bankruptcy proceedings in both the US and India. In the US, lenders have been fighting to liquidate domestic education software companies that Byju’s purchased for $820 million a few years ago and recoup payments.

Lenders are also trying to get paid through the Indian bankruptcy process, although it is unclear how much value is left in the Byju’s enterprise.