Byju Raveendran accused of trying to regain firm with hidden cash: Report

Byju Raveendran allegedly used Nebraska businessman William R. Hailer to try and buy out the US creditors to whom Byju's owes more than $1.2 billion

Byju Raveendran, the founder of the struggling edu-tech company Byju’s, allegedly tried to use loan money he hid from US lenders to secretly buy back a software company that an American trustee took over.

Byju's crisis: BYJU'S owner Byju Raveendran photo is seen on his company web page in this illustration. (Reuters)

According to a Bloomberg report based on new court filings, this was an attempt by Byju Raveendran to regain control of his collapsing startup, which is currently dealing with bankruptcy in India and legal troubles in the US.

The report alleges Raveendran hid millions of dollars of loan proceeds with OCI Ltd, a UK-incorporated logistics firm, despite claiming all the money had been spent.

Afterwards, he allegedly recruited Nebraska businessman William R. Hailer, who was a former political consultant, to buy out the US creditors to whom Byju's owes more than $1.2 billion, according to the report.

Raveendran wired $11.25 million to Rose Lake Inc, a company which Hailer ran for him to prove to the lenders that he was well funded, following which, the money was to be returned to Raveendran, the report quoted Hailer as saying.

Raveendran has denied wrongdoing in past responses to lender allegations, saying his actions were a justified response to overly aggressive tactics used by creditors who specialize in squeezing money out of distressed companies.

Lenders have been fighting Byju’s in both US state and federal courts for more than a year. Lenders claim Raveendran hid $533 million in loan proceeds that should have been repaid to creditors. In India, Byju’s is facing an insolvency proceeding, where a court-appointed professional has been tasked with raising money to repay lenders.