Investigation Unveils $533 Million Discrepancy at Byju’s

Recent filings with the Delaware Bankruptcy Court have brought to light serious allegations regarding a significant financial discrepancy involving the Indian education technology company Byju’s. The documents, submitted late last week, detail claims that $533 million, representing 44% of a $1.2 billion loan obtained nearly four years ago, has gone missing. Oliver Chapman, founder and chief executive of the UK-based OCI Limited, asserts that Byju's Alpha, a subsidiary of Byju’s, redirected these funds to another entity controlled by Byju Raveendran, the company's founder.

Understanding Byju’s Alpha

Byju’s Alpha is a special purpose vehicle established in the United States by Raveendran to facilitate the $1.2 billion loan from American lenders. The purpose of this funding was to support Byju's international expansion efforts. Following Raveendran's failure to repay the loan, control of Byju's Alpha shifted to the lenders.

Raveendran previously stated that the loan was intended for both organic and inorganic growth, including the acquisition of smaller companies. However, the latest allegations suggest a troubling diversion of funds that could severely impact the future of Byju’s.

Claims of Fund Diversion

In the court filings, Oliver Chapman alleges that Rupin Banker, a former executive at OCI, collaborated with Raveendran and others to misappropriate the funds. The alleged diversion came to light when Byju's Alpha, now under lender control, launched a lawsuit against OCI. Raveendran had claimed that the $533 million was allocated to OCI for advertising, marketing services, and the provision of tablets to Byju’s parent company, Think & Learn Pvt Ltd, as well as its subsidiaries.

However, Chapman contends that the funds were not used for legitimate business purposes. Instead, he claims they were transferred to a Singapore-based entity named Byju’s Global Pte Ltd, owned by Raveendran, suggesting that the funds may have been misappropriated for personal use.

Raveendran's Response

Raveendran has categorically denied these allegations, maintaining that the Glas Trust, which represents Byju's US lenders, is aware of how the funds were utilised. He intends to present further documentation to clarify the flow of money. In a statement from Lazareff Le Bars Eurl, the legal firm representing Byju’s, it was asserted that the filing appears to be an attempt to mislead the Delaware courts and to harm Raveendran personally, as well as potentially implicate other suspended directors at Think & Learn.

Current Status of Byju’s in India

In India, Think & Learn is currently undergoing insolvency proceedings, initiated after the Board of Control for Cricket in India sought recovery of ₹158 crore (approximately £15.5 million) owed for a sponsorship agreement. The insolvency resolution professional has begun the process of selling Byju’s assets, which include the Aakash coaching centre operator and other business units like GeoGebra, WhiteHat Jr, and Toppr. The assets up for sale also encompass inventory, accounts receivable, fixtures, furniture, the Byju’s Learning app, and various intangible assets and course materials. Higher education and upskilling firm Upgrad, along with Ranjan Pai’s Manipal Group, have expressed interest in acquiring the assets of Think & Learn.

The unfolding situation at Byju’s highlights the challenges faced by the company amid a tumultuous financial landscape, raising questions about governance and accountability at one of India’s most prominent edtech firms. The ongoing legal battles in both the United States and India are set to shape the future of Byju’s as stakeholders seek clarity amid the allegations of financial misconduct.