Byju Raveendran to file $2.5 billion damages claim against GLAS Trust's fund diversion allegations — Details here

Edtech platform Byju's founder Byju Raveendran is on the way to file a lawsuit worth $2.5 billion against GLAS Trust, while also saying he will submit new evidence at courts in the US to counter claims alleging $533 million was diverted from Byju’s Alpha, the company's American financing entity.

The development comes less than a week after a Delaware bankruptcy ordered Byju Raveendran to pay over $1.07 billion in a default judgment.

In its ruling last week, the US court had said that Byju's founders had refused to cooperate with legal efforts to locate almost half the proceeds from a $1.2 billion US term loan issued in 2021.

What did Byju Raveendran say?

Byju Raveendran has contested the grounds on which the order was based. He said that the Delaware court did not give him sufficient time to arrange an attorney to contest the case. The online tutor platform founder had earlier asked for 30 days for the same.

Along with challenging the order, he vowed to file a parallel $2.5 billion damage suit against GLAS Trust and entities assisting it in another US court.

He claimed that the entire money in question, $533 million, was accounted for. The majority of the amount, $479.62 million, was routed from the loan manager OCI to Revere Capital. It was then transferred to Byju's entities and finally to the parent company Think & Learn Pvt Ltd (TLPL).

That year, TLPL used the money to pay for acquisitons worth $3 billion, including that of Aakash Educational Services.

Byju Raveendran further argued that the documents GLAS Trust served during the legal proceedings establish the money trail. He said in a statement that he has submitted a motion as well in the Delaware Bankruptcy Court, where he sought correction of a so-called premature damages determination.

He argues that the court mistakenly included a damages award as part of a sanction order for delayed document production, even though GLAS Trust withdrew its request for a damages ruling in September and no liability was decided on the merits.

“The Court determined no liability on the merits of any of the claims of GLAS Trust and Byju Raveendran provided no defence against those claims,” the statement reads.

“It is simply outrageous that I have been attacked in this manner and, more importantly, that BYJU's customers and employees have been impacted by this attack based on the pure greed of these Lenders and GLAS Trust. These parties will now be brought before the courts and be required to answer some very tough questions,” Raveendran said.

What are the evidences? Will they be submitted in India?

Byju's said that the evidence it plans to submit includes bank records, email correspondence, and transfer trails that were obtained in US proceedings but have not been disclosed fully.

Raveendran said he will submit “clinching evidence before the US Courts, proving that GLAS Trust and the Resolution Professional (now managing BYJU's) repeatedly misled the Delaware Court, Indian & other Courts, and the public by falsely alleging that $533 million (Alpha Funds) was diverted by the founders”.

A litigation advisor for Byju Raveendran alleged that since early June of this year, the Delaware Court has been advised that GLAS Trust was misleading the Court in its submissions by claiming that it did not know how the Alpha Loan proceeds were used.

“These same allegations have been made by the RP of Think & Learn in Court submissions in India. The RP refused to provide information to Byju Raveendran that was requested by Byju Raveendran as ordered by the Delaware Court,” the advisor said.

“GLAS Trust & Alpha did not inform the Delaware Court that the alleged 'missing' funds were not missing at all but instead were used by Alpha and Think & Learn through an investment in shares of Think & Learn,” the advisor added.

Raveendran further said that GLAS Trust had attacked his and other founders' integrity for two years by repeating a story they knew was false.