US court finds Riju Ravindran in contempt for not disclosing details of $533M term loan proceeds

In the ongoing BYJU’S versus lenders dispute, a US court has ruled that Riju Ravindran, the brother of Byju Raveendran, is in contempt of court due to his refusal to disclose or confirm the whereabouts of the $533 million from term loan proceeds, said a release from the group of lenders.

Judge John T Dorsey of the US Bankruptcy Court for the District of Delaware delivered the ruling.

The court has ordered financial penalties to be imposed on Riju, with the specific amount to be decided in a subsequent hearing. Riju is one of three directors of BYJU'S parent Think and Learn Pvt Ltd.

In March, the US court prohibited further transferring or using any of the $533 million in loan proceeds, while also ordering the arrest of William Morton, Founder of Camshaft Capital Fund, LP.

Back then, the court also determined that BYJU’S Founder Byju and Co-founder Divya Gokulnath were collaborating with the defendants—Riju, Inspilearn LLC, and Camshaft Capital Fund, LP and its affiliates—and ordered their compliance with its ruling.

“I conclude Mr. Ravindran’s testimony is not truthful, that he either knows where the funds are located, or is intentionally avoiding obtaining the information from other sources. I therefore find that he is in contempt of my previous order to provide the information,” Judge Dorsey said at a show cause hearing on May 20, as stated in a media release by the steering committee of the ad hoc group of term loan lenders of BYJU’S $1.2 billion term loan B (TLB).

YourStory has reached out to BYJU’S for comments.

In 2021, BYJU’s Alpha, Inc, a US subsidiary of BYJU’S, received funds from the $1.2 billion TLB. In 2022, under Ravindran’s control, BYJU’S Alpha transferred $533 million of the loan proceeds to Camshaft Capital Fund, LP, a hedge fund established by Morton.

In March 2023, Ravindran transferred BYJU’S Alpha’s LP interest in Camshaft Capital Fund to Inspilearn LLC. Subsequently, it was transferred again and ultimately redeemed by an undisclosed entity in February 2024.

In March this year, the edtech firm said the funds from the $1.2 billion TLB are held by its wholly-owned subsidiary located outside the US.

“Mr. Ravindran…submitted sworn declaration, in which he proposed to explain why he could not obtain the information even though he is one of the three directors of Think and Learn. The actions outlined in the declarations were tepid at best, identifying a few emails that were unanswered and a request for financials that resulted in stale information,” Judge Dorsey noted on May 20.

Following the ruling, the steering committee of the ad hoc group of term loan lenders said, “...ruling validates what we have known all along: Riju Ravindran, his brother and co-founder, Byju Raveendran, and their conspirators fraudulently transferred $533 million in loan proceeds for no legitimate purpose other than to hide the money from the lenders to whom it is rightfully owed.”

The statement added, “With William Morton and now Riju found in contempt, the walls are closing in around Byju and his house of cards. We will continue to take all necessary legal actions to recover the stolen funds.”

The ongoing TLB dispute, involving the $533 million, represents one of the many challenges facing the edtech company. In January, lenders of BYJU’S, who collectively own over 85% of its $1.2-billion TLB, lodged an insolvency petition against the firm with the National Company Law Tribunal (NCLT).

Meanwhile, on May 19, the company announced that Mohandas Pai, former CFO and Board Member of Infosys, and Rajnish Kumar, former Chairperson of State Bank of India—will not renew their contracts as advisory board members at BYJU’S. 

The edtech firm—which appointed the duo to its advisory council in July last year following Deloitte’s departure as its auditor and the resignation of three prominent board members—said it was mutually decided not to renew the contractual agreement scheduled to end on June 30, 2024.