Legal Troubles for Byju's Founders in the US

Byju's Alpha, the US financing arm of the prominent edtech firm, has initiated a lawsuit against its co-founders Byju Raveendran and Divya Gokulnath, alongside former chief strategy officer Anita Kishore. The lawsuit, filed in a US court, accuses them of orchestrating a fraudulent scheme to transfer $533 million in loan proceeds, known as the "Alpha Funds," out of the company without any return value.

Denial and Counter-Allegations

Raveendran has vehemently denied the allegations, labeling them as "completely baseless and untrue." He contends that the lawsuit is part of a larger conspiracy by Glas Trust, the trustee for lenders to whom Byju's owes $1.2 billion, to seize control of the company through dubious means. Raveendran also highlighted a signed affidavit submitted to the Delaware court, detailing the utilization of the entire $1.2 billion loan, which he claims was ignored by Glas.

Allegations of FCPA Violations

Further complicating matters, Raveendran has accused individuals associated with the lenders, including Vishal Chanani of Redwood and Dan Ornstein of HG Vora, of violating the Foreign Corrupt Practices Act (FCPA) in an alleged bribery scheme involving an Indian court official. Glas Trust is reportedly under investigation in a criminal case in India related to these allegations.

The Core of the Lawsuit

The court filing reveals that Byju's Alpha alleges the defendants engaged in a "lawless scheme" to divert Alpha Funds to other group affiliates following the company's default on a $1.2 billion term loan in 2022. Specifically, Raveendran is accused of transferring the company's limited partnership interest in Camshaft Capital Fund, valued at over $540 million, to a non-guarantor affiliate for no consideration.