Mystery behind Byju's ‘hidden’ $533 million: Here's where it's tied up

A complex web of financial mismanagement revealed a trail leading a ‘hidden’ sum of $533 million, traced back to edtech firm Byju's.

Edtech company Byju's, currently grappling with an intense financial crisis, said on Sunday they were unable to pay the salaries of their employees due to the investors of their company blocking the funding. However, a web of financial mismanagement and court proceedings traced a hefty sum of $533 million to Byju's, tied up in an offshore account, revealed a US court proceeding.

Byju Raveendran, founder of edtech firm Byju’s.

A hedge fund in Florida has been accused of helping Think and Learn Ltd in concealing $533 million from its investors. This sum of money was initially held by Byju's overseas unit Alpha Inc, which is a bankrupt shell company owned by Think and Learn.

The allegations of the hidden $533 million raised several accusations of corruption and gross mismanagement against Think and Learn CEO and founder Byju Raveendran, just as investors continue to push for his ouster from the top post in the company.

During a hearing on Friday, US Bankruptcy Judge John Dorsey told the accused Florida hedge fund Camshaft Capital Fund to reveal the location of the hidden money or face possible sanctions from the court this week.

What is the mystery behind Byju's missing $533 million?

It has been alleged that Alpha Inc, run by Byju's parent company Think and Learn, transferred $533 million to Florida hedge fund Camshaft Capital Fund after going bankrupt, despite owing $1.2 billion to lenders. This transaction was reportedly done by the CEO's brother, Riju Raveendran.

Due to the non-payment of loans, multiple investors and lenders of Alpha Inc approached a US court, commencing a legal battle against Byju's and its parent firm seeking the payment of $1.2 billion and the whereabouts of $533 million.

Camshaft fought efforts to disclose details about the money because a hedge fund has a duty to protect its clients, lawyer Pieter Van Tol told Dorsey. The hedge fund also argued that Byju’s and the lenders should instead get information about the cash from a Delaware company called Inspilearn, which got the money from Camshaft before it was transferred to the unnamed trust.

Lenders have been pushing that the $533 million, currently tied up in untraced offshore accounts, should be used to pay the $1.2 billion debt. However, Camshaft has refused to reveal the true whereabouts of the money.

A US court bench has said that if the Florida hedge fund does not reveal the account where the money is stored, the court will issue a show cause notice against the firm and impose multiple sanctions.