US Bankruptcy court finds Byju’s, Riju Ravindran, and Camshaft Capital liable for fraud

The court held Byju’s parent company responsible for misleading lenders and facilitating the transfers

A US bankruptcy court has ruled that Think & Learn Pvt Ltd (Byju’s), its director Riju Ravindran, and hedge fund Camshaft Capital orchestrated a fraudulent scheme that diverted $533 million from Byju’s Alpha, a U.S. subsidiary of the edtech firm. The ruling marks the latest setback for the Byju Raveendran-led edtech firm.

Judge John T Dorsey of the U.S. Bankruptcy Court for the District of Delaware found that the defendants engaged in a deliberate effort to misappropriate funds meant to repay Byju’s lenders.

The court granted summary judgment in favor of Byju’s Alpha, with damages to be determined later.

The ruling confirms that Byju’s Alpha, under Riju Ravindran’s leadership, violated loan covenants shortly after securing a $1.5 billion loan and then moved the funds through a series of fraudulent transfers. The court also found that Riju Ravindran breached his fiduciary duties and actively worked to conceal the transactions.

The order cites statements from Byju’s founder Byju Raveendran, who allegedly told a financial advisor that the money was “someplace the lenders will never find it.”

The court held Byju’s parent company responsible for misleading lenders and facilitating the transfers, while also determining that Camshaft Capital, a hedge fund founded by William Morton, was a “sham” entity used to execute the fraud.

(This is a developing story)