Judge John T. Dorsey issued the ruling following Ravindran's repeated refusal to disclose or ascertain the whereabouts of $533 Mn in term loan proceeds transferred from BYJU’s Alpha, Inc
In making its ruling, the Court found that Riju Ravindran’s testimony “lacks all credibility”
Additionally, the Court sanctioned Ravindran by precluding him from arguing in the ongoing fraudulent transfer litigation
Riju Ravindran, brother of BYJU’S
founder and CEO Byju Raveendran and a director at Think & Learn Pvt Ltd, was found in contempt of court at a show cause hearing on May 20, 2024, in the United States Bankruptcy Court for the District of Delaware.
Judge John T. Dorsey issued the ruling following Ravindran’s repeated refusal to disclose or ascertain the whereabouts of $533 Mn in term loan proceeds transferred from BYJU’s Alpha, Inc.
In making its ruling, the Court found that Riju Ravindran’s testimony “lacks all credibility,” stating that he either knows where the $533 Mn in term loan proceeds is being hidden and will not disclose it, or he did not attempt to find out the location.
Accordingly, the court ordered financial penalties against Ravindran, the amount of which will be determined at a future hearing.
Additionally, the Court sanctioned Ravindran by precluding him from arguing in the ongoing fraudulent transfer litigation that the transfers in question were made for a legitimate purpose, effectively leaving him without a defence in those actions.
“I conclude Mr. Ravindran’s testimony is not truthful, that he either knows where the funds are located, or is intentionally avoiding obtaining the information from other sources. I therefore find that he is in contempt of my previous order to provide the information,” Dorsey said.
The missing $533 Mn is central to a dispute between lenders owed over $1.2 Bn and Think & Learn Pvt Ltd, the parent company of BYJU’s. This conflict is unfolding in courts in both Delaware and New York. Previously, lenders seized control of a holding company established by Think & Learn to issue the $1.2 Bn in debt.
This entity, Byju’s Alpha, is now under bankruptcy proceedings overseen by Judge Dorsey. Additionally, Riju Ravindran is appealing a decision by Delaware’s Chancery Court that approved the seizure of Byju’s Alpha by the lenders.
“Today’s ruling validates what we have known all along: Riju Ravindran, his brother and co-founder, Byju Raveendran, and their conspirators fraudulently transferred $533 Mn in loan proceeds for no legitimate purpose other than to hide the money from the lenders to whom it is rightfully owed,” the steering committee of the ad hoc group of term loan lenders of BYJU’S $1.2 Bn term loan, said.
Earlier this year, BYJU’S foreign lenders, who jointly provided over 85% of the company’s $1.2 Bn Term Loan B (TLB), filed an insolvency petition with the Bengaluru bench of the National Company Law Tribunal (NCLT) against the startup.
Earlier it was reported that BYJU’S offered to pay back the entire $1.2 Bn TLB to its lenders in less than six months. The edtech major made an offer to repay $300 Mn of the distressed debt within three months and the remaining amount in the next three months if its amendment proposal was accepted.
Meanwhile, ace investor TV Mohandas Pai and ex-SBI Chairman Rajnish Kumar will step down from the edtech major’s advisory panel next month. The two will leave the advisory committee once their year-long tenure ends on June 30.
BYJU’S net loss surged 81% YoY to INR 8,245.2 Cr (close to $1 Bn) in FY22 even as operating revenues also rose over 120% to INR 5,014.6 Cr during the year under review, largely on the back of coaching arm Aakash.
