Byju’s Faces Financial Turmoil: Mystery Surrounding $533 Million Held in Offshore Trust
The renowned Indian edtech firm, Byju’s, is currently entangled in a complex financial saga involving offshore dealings, legal battles, and a substantial sum of $533 million. The company’s parent entity, Think & Learn Pvt, finds itself at the heart of this convoluted situation, with significant repercussions for its founder, Byju Raveendran.
The renowned Indian edtech firm, Byju’s, is currently entangled in a complex financial saga involving offshore dealings, legal battles, and a substantial sum of $533 million. The company’s parent entity, Think & Learn Pvt, finds itself at the heart of this convoluted situation, with significant repercussions for its founder, Byju Raveendran.
The turmoil began when Byju’s major stakeholders recently voted to oust Mr. Raveendran from his positions as CEO and board member, marking a significant turn of events for the company established in 2015. Once valued at over $20 billion, Byju’s has experienced a dramatic decline of nearly 90% in the past year, raising concerns about its financial stability.
At the center of the controversy lies $533 million, allegedly concealed with the assistance of a Florida hedge fund, Camshaft Capital Fund. This substantial amount, pivotal to the ongoing financial dispute, was initially held by Byju’s Alpha Inc., a bankrupt shell company associated with Think & Learn. Following default on a $1.2 billion loan, lenders took control of Byju’s Alpha, prompting the transfer of the $533 million to Camshaft Capital Fund and subsequently to an undisclosed offshore trust by Raveendran’s brother, Riju Ravindran.
Last month, Alpha filed for bankruptcy protection due to the loan default, intensifying the legal battle between lenders and Byju’s. A US court decision granted lenders control over Alpha, a ruling contested by Riju Ravindran. Meanwhile, Camshaft Capital Fund’s reluctance to disclose details about the money has raised suspicions, with a US judge warning of potential sanctions for non-compliance.
Byju’s woes extend beyond legal disputes, with auditor resignations, bankruptcy proceedings initiated by lenders, and a US lawsuit challenging loan terms adding to its challenges. The company’s financial struggles have affected its operations, leading to difficulties in processing employee salaries amid disputes with investors.
Despite its current predicament, Byju’s has a significant legacy in India’s edtech sector, having evolved from offering classes for MBA aspirants to becoming a leading provider of educational resources for school students through its learning app launched in 2015. However, the unfolding financial turmoil poses a considerable threat to its future trajectory and reputation in the industry.
Sources By Agencies
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