In a significant development in the ongoing legal saga involving Indian edtech giant BYJU&rsquo;s, a US bankruptcy court has found that Think &amp; Learn Pvt Ltd (BYJU&rsquo;s), its top executives, and an associated hedge fund orchestrated and benefitted from a fraudulent scheme involving $533 million in loan funds.
The ruling, issued by Judge John T Dorsey of the United States Bankruptcy Court for the District of Delaware, holds BYJU&rsquo;s Alpha, Inc.&mdash;a Delaware-based special purpose vehicle established by BYJU&rsquo;s&mdash;alongside Riju Ravindran, Camshaft Capital Fund, and Think &amp; Learn Pvt Ltd responsible for actual fraudulent transfers and conversion of loan proceeds.
Court Slams BYJU&rsquo;s and Directors 
The order comes as part of a summary judgment in favour of BYJU&rsquo;s Alpha&rsquo;s current management and the steering committee of the ad hoc group of term loan lenders, who alleged that over half a billion dollars were misappropriated from the $1.5 billion Term Loan B facility extended to BYJU&rsquo;s Alpha.
The court found that:
<ul style="margin-top: 0cm;" type="disc">
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">Riju Ravindran, a director of BYJU&rsquo;s Alpha and Byju&rsquo;s brother, breached his fiduciary duties.</li>
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">Camshaft Capital Fund, labelled a &ldquo;sham hedge fund,&rdquo; facilitated the concealment of the Alpha funds.</li>
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">Think &amp; Learn Pvt Ltd (T&amp;L) played a central role in diverting funds through unauthorized transfers.</li>
</ul>
In a particularly scathing commentary, the court referred to Ravindran as the &ldquo;most incompetent officer or director of a company in Delaware history,&rdquo; highlighting deliberate efforts to mislead creditors, hide fund locations, and obstruct court-ordered discovery processes.
Judge Dorsey noted that the defendants repeatedly engaged in deception, including failing to provide financial records, orchestrating false resignations, and making conflicting declarations under oath about the use and status of the funds.
The Lawsuit 
Following the judgment, BYJU&rsquo;s Alpha has now filed a fresh lawsuit against co-founder Byju Raveendran, his wife and co-founder Divya Gokulnath, and key advisor Anita Kishore, accusing them of co-orchestrating the theft and concealment of the $533 million Alpha funds.
The lawsuit seeks:
<ul style="margin-top: 0cm;" type="disc">
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">Damages for breach of fiduciary duties</li>
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">Damages for aiding and abetting breaches</li>
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">An accounting of the Alpha funds</li>
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">Damages for civil conspiracy and conversion</li>
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">Reimbursement of legal and interest costs</li>
</ul>
In a statement, the ad hoc group of term loan lenders said:
&ldquo;Byju, Divya, and Anita deliberately hid the assets of BYJU&rsquo;s Alpha and repeatedly were deceptive about the location of the money in order to steal funds rightfully owed to the lenders.&rdquo;
The lenders warned that unless the funds are returned, the individuals involved could face consequences under US law, stating:
&ldquo;They can either choose to live the rest of their days as international fugitives or face the music and return the money they stole.&rdquo;
Timeline of Alleged Fraud
<ul style="margin-top: 0cm;" type="disc">
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">2021: BYJU&rsquo;s establishes BYJU&rsquo;s Alpha in the US to receive $1.5 billion in term loan funds.</li>
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">March-April 2022: Alpha defaults on loan covenants; $533 million is moved through a series of unauthorized transfers.</li>
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">March 2023&ndash;Feb 2024: Funds are shifted from Camshaft to Inspilearn LLC and then to an offshore trust.</li>
<li class="MsoNormal" style="font-family: georgia, palatino, serif; font-size: 12pt;">October 2024: Byju Raveendran, under oath, claims the funds were spent, contradicting earlier statements.</li>
</ul>
Judge Dorsey also confirmed that Camshaft Capital Fund, operated by William Morton, was a &ldquo;sham&rdquo; entity, questioning the rationale behind investing loan funds there.
Reputational Impact
This ruling marks a severe reputational and legal setback for BYJU&rsquo;s, once hailed as India&rsquo;s most valuable startup. The edtech giant has faced growing scrutiny over its governance, financial transparency, and international expansion strategy.
While the company had earlier claimed the funds were safely held within its subsidiaries, the court concluded that &ldquo;T&amp;L actively misled lenders,&rdquo; adding to the mounting evidence of financial misconduct.
Next Steps
The damages are yet to be determined, and enforcement actions may follow if the funds are not recovered. Meanwhile, legal proceedings in the US continue as BYJU&rsquo;s Alpha seeks full restitution.
(with inputs from IANS)&nbsp;
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Company founders Byju Raveendran and his wife and co-founder Divya Gokulnath

Indian start-up faces major legal blow over fraud scheme; US bankruptcy court says funds diverted illegally

BYJU’s Alpha Sues Founders over Alleged $533 Mn Theft

Indian start-up faces major legal blow over fraud scheme; US bankruptcy court says funds diverted illegally

April 10, 2025 | 12:03 IST