Byju’s founder told ally to flee the US to avoid testifying

Byju Raveendran, founder and chief executive officer of Think and Learn Pvt., speaks during the Credit Suisse Asian Investment Conference in Hong Kong, China, on Tuesday, March 26, 2019. The conference runs through March 28. Photographer: Paul Yeung/Bloomberg

Byju Raveendran, the founder of Indian tech firm Byju’s, tried to convince a Nebraska businessman to leave the US in order to avoid testifying in federal court about suspicious activities he observed while working with the controversial executive, the businessman told a judge during a court hearing Thursday.

The businessman, William R. Hailer, said Raveendran sent him a plane ticket to Dubai just two days before Hailer was set to testify about Raveedran’s efforts to regain control of parts of the Byju’s education empire that had been taken over by a court-authorized trustee. A copy of the ticket, which cost nearly $10,700, was shown in court Thursday.

Raveendran reiterated a job offer with a $500,000 salary if Hailer would immediately come to Dubai and start working, Hailer told US Bankruptcy Judge John T. Dorsey during the hearing in Wilmington, Delaware.

“He encouraged me not to testify,” Hailer alleged. “He said I should come to Dubai and he said the salary would start on day one.”

Dorsey said Hailer’s testimony required the court to refer the allegations to federal prosecutors. Typically, judges send a letter to the US Justice Department outlining the reasons that the judge believes a crime may have been committed. Federal prosecutors then decide whether to investigate.

Raveendran has been trying to regain control of his capsizing education technology empire, which is under court supervision in both India, where the parent is based, and the US, where some of its valuable units are located, according to a court declaration filed by Hailer.

Earlier this year, Dorsey held another business ally of Byju’s in contempt of court for fleeing the US just before he was set to testify.

Raveendran allegedly recruited Hailer, a former political consultant, to try to buy out US creditors owed more than $1.2 billion under a loan, according to the filing with the US Bankruptcy Court in Delaware. Raveendran could then swap that debt for ownership of Epic!, a education-software firm. The plan ultimately failed.

“Over the last several months I have been used as a pawn in Byju’s manipulation of the law,” Hailer wrote in testimony filed earlier this week. Hailer is set to testify in federal court today on behalf of a trustee, which is planning to sell Epic! in order to raise money for Byju’s creditors, including US lenders.

A representative for Byju’s and a lawyer for Raveendran did not return requests for comment.

Raveendran has denied wrongdoing in past responses to lender allegations, saying his actions were a justified response to overly aggressive tactics used by creditors who specialize in squeezing money out of distressed companies.

Lenders have been fighting Byju’s in both US state and federal courts for more than a year. Lenders claim Raveendran hid $533 million in loan proceeds that should have been repaid to creditors. Byju’s is also facing an insolvency proceeding in India, where a court-appointed professional has been tasked with raising money to repay lenders.