Byju's Ordered by US Court to Freeze $533 Million Debt to Lenders

In a significant development, the steering committee representing term-loan lenders of Byju's $1.2 billion loan announced on Friday that a US judge has issued an order to halt any further movement or utilization of $533 million by the renowned edtech company, which remains outstanding to the lenders.

As per the statement released by the steering committee, the judge has prohibited Byju's co-founders, Byju Raveendran and Divya Gokulnath, from transferring or utilizing any portion of the $533 million loan proceeds previously under the control of Camshaft Capital Fund, and subsequently shifted to an undisclosed offshore trust.

The court also determined that Raveendran and Gokulnath are colluding with the defendants and instructed them to adhere to the court's directives.

In its ruling, the court affirmed that the transfer of funds from Byju's Alpha, the company's US subsidiary, along with their ongoing concealment, likely constitutes a fraudulent conveyance.

The judge remarked on the significance of the parent company attempting to obscure the whereabouts of the assets, implying potential fraudulent activity. The judge's order expressed skepticism towards Raveendran's credibility, suggesting either dishonesty or extreme incompetence in his corporate role.

Moreover, the court issued an arrest warrant for William Morton, the founder of Camshaft Capital Fund, due to his repeated failure to appear in court and provide essential information regarding the $533 million transfers and the present status and location of the funds.

The steering committee representing the lenders asserted that Byju Raveendran, in collaboration with his brother Riju, wife Divya, and fugitive William Morton, is actively involved in defrauding Byju's lenders.

The court's decision to freeze assets marks a crucial step towards recovering the missing $533 million, and the lenders' steering committee vowed to pursue all legal avenues to reclaim their rightful dues.