New York/New Delhi, April 10 (IANS) Byju’s Alpha, a special purpose financing vehicle established by Byju’s in the US to receive proceeds of a $1.5 billion Term Loan B, has sued Byju Raveendran, co-founder and his wife Divya Gokulnath for “orchestrating theft of $533 million”.
Byju’s Alpha said that following the $533 million judgment of the United States Bankruptcy Court for the District of Delaware against Riju Ravindran and Byju’s ultimate corporate parent in India, the company has now filed a lawsuit against Byju Raveendran, his co-Founder and wife Divya Gokulnath, and his consigliere (advisor), Anita Kishore.
The lawsuit states that each of them co-orchestrated and executed a lawless scheme to conceal and steal $533 million of loan proceeds (the ‘Alpha Funds’), according to a press release.
“On the heels of the Delaware Bankruptcy Court’s recent judgment against his brother and companies, this action is being brought to now hold Byju Raveendran, the former CEO of BYJU’s Alpha, and two more of his co-conspirators – namely his co-founder and close business associate – accountable for their roles in masterminding the theft of more than half a billion dollars,” said the ad hoc group of term loan lenders of Byju’s Alpha’s Term Loans.
They further stated that “it is clear that Byju, Divya, and Anita deliberately hid the assets of BYJU’s Alpha and repeatedly were deceptive about the location of the money in order to steal funds rightfully owed to the Lenders”.
“In light of the Court’s recent decision, there can be no doubt that they acted unlawfully and tried to cover their tracks, breaching fiduciary duties and making numerous misrepresentations, among other misconduct, in the process. If it is not abundantly clear to them by now, Byju and his cohorts will soon learn that the laws of the United States are immutable, and they can either choose to live the rest of their days as international fugitives or face the music and return the money they stole,” stated ad hoc group of term loan lenders of Byju’s Alpha.
Starting in March 2022, mere months after receiving the Term Loans, Byju’s Alpha, then under the control of the Byju’s enterprise, defaulted on the credit agreement.
In April, Byju’s allegedly began the first in what was a series of systematic and unlawful fraudulent transfers of the Alpha Funds. Byju’s Alpha, including Byju and his brother Riju Ravindran personally, conceded defaults had occurred by entering into numerous amendments and forbearances to the credit agreement.
“In an effort to hide their tracks, Byju, Divya, and Anita repeatedly misrepresented and contradicted themselves regarding the use and location of the $533 million Alpha Funds,” the press release added.
On March 15, 2024, Byju’s issued a statement in response to a preliminary injunction ordered by the Delaware Bankruptcy Court whereby the Court froze the Alpha Funds – preventing their further use or movement.
In the statement, Byju’s represented that “the said funds are safely parked in one of our subsidiaries and, as per the order, it will rightfully remain there.”
On October 9, 2024, Byju issued a declaration under oath to the Delaware Bankruptcy Court swearing that the Alpha Funds had been spent.
In its lawsuit, Byju’s Alpha is seeking an award of damages for Byju’s breach of fiduciary duties; an award of damages for Byju’s, Divya’s, and Anita’s aiding and abetting of the breach of others’ fiduciary duties; an accounting of the Alpha Funds; an award of damages for conversion and civil conspiracy; reimbursement of all attorneys’ fees, costs, and expenses; reimbursement of interest expenses; and any other relief that the court may deem just, proper, or equitable.
—IANS
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