Byju Raveendran, the founder of embattled ed-tech giant Byju’s, is facing allegations of using concealed loan funds to attempt a buyback of a software company seized by a U.S. trustee. According to a Bloomberg report citing court filings, Raveendran’s actions were part of a larger effort to regain control of his struggling startup, which is embroiled in bankruptcy proceedings in India and legal disputes in the United States.
The report claims Raveendran transferred millions of dollars in loan proceeds to OCI Ltd, a UK-based logistics firm, despite asserting that the funds had been fully spent. These hidden funds allegedly fueled a scheme to buy out U.S. creditors to whom Byju’s owes over $1.2 billion.
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To execute this plan, Raveendran purportedly collaborated with Nebraska businessman and former political consultant William R. Hailer. The report reveals that Raveendran wired $11.25 million to Hailer’s company, Rose Lake Inc., as a demonstration of his financial capability. Hailer allegedly planned to return the funds to Raveendran after they served their purpose of reassuring lenders.
Hailer was reportedly tasked with negotiating deals to settle debts with the creditors. However, creditors argue that Raveendran owes them $533 million in loan proceeds that were diverted instead of being used for repayment.
Raveendran has denied any wrongdoing, asserting in earlier responses to similar allegations that his actions were necessary countermeasures against what he described as overly aggressive tactics by creditors. These creditors, he claims, are focused on extracting money from financially distressed firms like Byju’s.
The legal battle between Byju’s and its creditors has been ongoing for over a year in both U.S. state and federal courts. Meanwhile, in India, Byju’s faces insolvency proceedings, with a court-appointed professional overseeing efforts to raise funds to repay the company’s debts.
The controversy has intensified scrutiny on Byju’s financial practices and the actions of its leadership, casting a shadow over the once-celebrated ed-tech startup.
