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In India, Byju’s is facing insolvency proceedings, with a court-appointed professional working to raise funds to repay creditors.
Byju Raveendran (File photo)
The founder of edtech giant Byju’s, Byju Raveendran, reportedly attempted to use concealed loan proceeds to secretly repurchase Epic!, a US-based education software company taken over by an American trustee, according to court filings.
Byju Raveendran’s Alleged Attempt to Regain Control
According to Nebraska businessman William R. Hailer, Raveendran has been trying to regain control of his troubled education technology empire amid ongoing legal battles, Bloomberg reported.
Byju’s Struggles in US and India
Byju’s is under court supervision in both India, where its parent company is based, and the US, where some of its most valuable units are located.
Allegations of Loan Manipulation
According to the Bloomberg report, Raveendran allegedly recruited Hailer, a former political consultant, to help buy out US creditors owed more than $1.2 billion under a distressed loan. The proposed plan involved swapping the debt, which was trading at just 0.24 cents on the dollar, for ownership of Epic! However, the effort failed, as per filings with the US Bankruptcy Court in Delaware.
Testimony Against Raveendran
In his court declaration, Hailer accused Raveendran of exploiting him. “Over the last several months, I have been used as a pawn in Byju’s manipulation of the law,” Hailer stated. He is set to testify on behalf of a trustee planning to sell Epic! to raise funds for Byju’s creditors.
Financial Transactions Under Scrutiny
Hailer revealed that Raveendran wired $11.25 million to Rose Lake Inc., a company managed by Hailer, as part of a strategy to demonstrate financial stability to lenders. The funds originated from OCI Ltd., a UK-based logistics firm that had received hundreds of millions in loan proceeds now being pursued by US creditors.
Accusations of Misappropriation
Lenders allege that Raveendran concealed $533 million in loan proceeds intended for repayment. While Raveendran has denied any wrongdoing, claiming his actions were a response to aggressive creditor tactics, lenders have filed lawsuits in both U.S. state and federal courts to reclaim the funds.
Broader Implications
In India, Byju’s is facing insolvency proceedings, with a court-appointed professional working to raise funds to repay creditors. The ongoing legal battles in both countries highlight the precarious position of the edtech giant as it struggles to stabilise its finances and operations.
