Byju’s Alpha sues Byju Raveendran, Divya Gokulnath in US cou
Byju’s Alpha sues Byju Raveendran, Divya Gokulnath in US court for orchestrating theft of $533 mn
Byju’s Alpha, a special purpose financing vehicle established by Byju’s in the US has sued Byju Raveendran, co-founder and his wife Divya Gokulnath for "orchestrating theft of $533 million”
NEW YORK/NEW DELHI — 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.
