Byju Raveendran, the founder of the troubled Indian edtech company Byju’s, is accused of attempting to use hidden loan proceeds to secretly repurchase a software company, according to a recent court filing in the United States.
The filing, submitted to the US Bankruptcy Court in Delaware, claims that Raveendran sought to reclaim his education technology empire, which is under legal scrutiny in both India and the US. Nebraska businessman William R. Hailer, who filed the declaration, stated that Raveendran enlisted him to buy out US creditors owed over $1.2 billion under a loan agreement. The alleged plan involved acquiring Epic!, a US-based education software firm, by leveraging the distressed loan, which was reportedly trading at just 24 cents on the dollar. However, the attempt was unsuccessful.
Allegations of Manipulation
Hailer, a former political consultant, claims he was used as a “pawn” in what he described as Raveendran’s manipulation of the legal process. He is expected to testify on behalf of a trustee tasked with selling Epic! to raise funds for Byju’s creditors. The trustee’s efforts aim to recover funds owed to US lenders.
Court documents reveal that Raveendran wired $11.25 million to Rose Lake Inc., a company controlled by Hailer. The funds were intended to demonstrate financial backing during negotiations with creditors, with the understanding that the money would be returned to Raveendran afterward. This money reportedly originated from OCI Ltd., a UK-based logistics firm that received a portion of the loan proceeds lenders are attempting to reclaim.
Dispute Over Loan Proceeds
Lenders allege that Raveendran concealed $533 million in loan proceeds that should have been used to repay creditors. Hailer’s filing notes that he tried to verify OCI Ltd.’s possession of the funds, but his efforts were unsuccessful. Despite Raveendran’s claims that all the funds had been spent, Hailer stated that he held regular discussions with Raveendran and other associates within Byju’s operations. These meetings included a visit to Raveendran’s family compound in Dubai, where discussions reportedly took place with potential investors backing Raveendran’s efforts to regain control of the company.
Legal Battles in India and the US
Byju’s is facing intense legal scrutiny on multiple fronts. In India, the company is undergoing insolvency proceedings, with a court-appointed professional working to raise funds to repay creditors. Meanwhile, in the US, lenders have pursued legal action in state and federal courts for over a year, accusing Raveendran of misconduct and withholding substantial funds.
Raveendran has previously denied allegations of wrongdoing, asserting that his actions were a justified response to aggressive tactics by creditors. Representatives for Byju’s and Raveendran have not responded to requests for comment on the latest allegations.
