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May 22, 2024

Byju’s Director Faces Financial Penalties Over Missing $533 Million: US Judge Declares ‘Not Truthful’ Testimony

A significant ruling has been made against Riju Ravindran, a director of the Indian tech giant Think & Learn Pvt, the parent company of the renowned education platform Byju’s. Ravindran, the brother of Byju Raveendran—the company’s founder—faces severe financial penalties for his failure to comply with a US judge’s directive to locate $533 million owed to creditors.

US Bankruptcy Judge John Dorsey, during a hearing in Wilmington, Delaware, criticized Ravindran for his lack of genuine effort to trace the missing funds. “I conclude Mr. Ravindran’s testimony is not truthful,” Dorsey stated. According to the judge, Ravindran either knows the whereabouts of the money and is withholding that information or has refused to investigate its location.

This decision marks a symbolic win for the lenders, represented by Glas Trust, but primarily serves to exert limited pressure on Ravindran. Judge Dorsey announced a forthcoming hearing to determine the extent of financial penalties Ravindran would face and to assess whether he possesses any assets under US jurisdiction that could be seized.

Ravindran, his brother Byju, and Byju’s wife are the only directors of Think & Learn. Dorsey has repeatedly shown frustration with the company’s reluctance to disclose the location of the missing funds. Earlier this year, the judge ordered the arrest of a hedge fund manager who aided Ravindran in moving the money. This manager also defied a court order to reveal the money’s location, which further complicated the situation.

While Judge Dorsey refrained from issuing an arrest warrant for Ravindran—an Indian national currently residing in Dubai—the absence of an extradition treaty between the United States and the United Arab Emirates complicates any potential enforcement actions.

In court, Ravindran’s attorney, Sheron Korpus, argued that his client had made every effort to find the money, but claimed that Byju Raveendran and his wife were also unable to provide any information. “Everybody has their own family dynamic,” Korpus explained to the judge.

The missing $533 million is a central issue in an ongoing legal battle between Think & Learn and lenders owed more than $1.2 billion. These disputes are currently being contested in courts located in Delaware and New York. Previously, lenders took control of a holding company created by Think & Learn to issue the $1.2 billion debt. This entity, Byju’s Alpha, is currently under bankruptcy protection overseen by Judge Dorsey. Ravindran is actively appealing a decision by Delaware’s Chancery Court that approved this seizure.

The case, known as BYJU’s Alpha Inc., 24-10140, continues in the US Bankruptcy Court District of Delaware in Wilmington. This high-profile case not only underscores the complexities of international finance and corporate governance but also highlights the ongoing challenges creditors face in reclaiming funds from multinational entities.

As the legal proceedings advance, all eyes remain on the forthcoming decisions and their potential impacts on Byju’s operations and its directors. The unfolding events will likely set significant precedents in corporate accountability and financial compliance on an international scale.

Jhumpa Lahiri

Jhumpa Lahiri

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