Byju Raveendran Finally Broke Silence, Explains Missing $533 Million Amid Fraud Allegations

Byju Raveendran, founder of Indian ed-tech giant Byju’s has finally broken his silence on the disappearance of $533 million in lender funds. In a US bankruptcy court filing on Thursday, Byju Raveendran claimed the money was used for legitimate business purposes that has now contradicted lenders’ allegations of fraud.”We decided to utilise the proceeds of our Term Loan B (TLB) towards aggressive global organic and inorganic expansion. Subsequently, the total marketing and branding cost for this expansion was more than $200 million. The company also completed multiple small global acquisitions and set up offices in seven new countries,” He said in the US filing.

It was in  2021, that Byju’s secured a $1.2 billion loan to fuel the international expansion of his ed tech business Byju’s. Raveendran stated that $200 million went towards marketing including sponsoring the FIFA World Cup and partnering with Lionel Messi. Another $300 million funded losses in Tangible Play businesses and had immense losses.

Also, read| Supreme Court Questions Byju’s Preference For BCCI Over Rs 15,000 Crore Other Liabilities

Early in August,  Lenders alleged that $533 million was transferred offshore to entities linked to Raveendran. However, he claims this was for legitimate commercial purposes and not transferred to any entities linked to his business. The money was allegedly sent to a Miami hedge fund, then to UK-based OCI Ltd which spent the funds, reducing promissory notes.

In the US Bankruptcy Court, lenders argued that Byju Raveendran’s brother Riju Raveendran and the Miami hedge fund should repay the missing funds. Judge John Dorsey expressed concerns about potential fraud stating that Riju’s actions “seem like pretty much straight-up fraud.” However, Raveendran denied manipulating accounts or using the funds for personal gain or any other purposes. He claimed lenders’ allegations are based on misattributed statements and misinterpretation. Byju’s lawyers argued that the company needed time to gather information to defend itself and to gather possible data to prove it.

Lenders have been trying to track down the missing funds for over a year but in vain. They allege that Byju manipulated its accounts concealed the money’s whereabouts and hid everything from them. Raveendran’s meeting with lender advisers where he allegedly said the money would never be found and been a way for rumours and concerns. Judge Dorsey indicated he may rule against the hedge fund but did not specify his decision on Byju’s or Riju’s. The judge criticised Riju and his illegal way of transferring funds without authority.

Also, read| Once Valued At $22 Billion, Byju’s Value Is Now Cut To Zero