Byju’s Alpha sues founders for $533 mn theft

Bengaluru: Byju’s Alpha Inc, a US special purpose vehicle established by Byju’s, is suing Byju’s founders in Delaware Court for orchestrating theft of $533 million, the Byju’s subsidiary said on Thursday. Byju’s founders, later the same day, responded that the allegations are “completely baseless and untrue”.

Byju’s Alpha was established to receive proceeds of a $1.5 billion Term Loan B. This loan was disputed in the Delaware Bankruptcy Court which recently ruled that Byju’s is in default of the loan and guilty of fraudulent transfer of the $533 million.

The current lawsuit by Alpha states that founder Byju Raveendran, his wife/co-founder Divya Gokulnath, and his consigliere Anita Kishore are responsible for concealing and stealing $533 million of loan proceeds rightfully owed to the lenders, as per an official press release.

Quoting the lenders, the statement said, “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.”

It also added that according to the lenders, either Byju has consistently lied about the whereabouts of the Alpha funds over the last two years in court statements and other entities, or he is in violation of a court order.

In the lawsuit, Byju’s Alpha is seeking awards of damages for Byju’s breach of fiduciary duties, for Raveendran, Divya, and Anita aiding the breach of others’ fiduciary duties, and for conversion and civil conspiracy, as well as an accounting of the Alpha funds and reimbursement of attorneys’ fees and interest expenses.

Byju’s founders denied these allegations, saying that “this lawsuit is a part of their (the lenders’) conspiracy to wrestle control of Byju’s through all possible nefarious means” in a statement.

They added that GLAS is using this as a strategy to whitewash their criminal and unethical activities in India.

“A signed and verified affidavit that we submitted in the court of Delaware has the details of how the entire $1.2 billion loan was spent, to the last dollar. And yet, that affidavit was conveniently ignored and GLAS has continued to raise the question of the so-called missing $533 million repeatedly to mislead,” said Byju’s founders.

They reiterated that this comes soon after Byju’s public statements and revelation of an FIR filed against GLAS Trust, EY executives, and the former interim resolution professional for their role in allegedly sabotaging Byju’s insolvency proceedings.