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Byju’s allegedly hid $533 million in obscure hedge fund, claim lenders in lawsuit: Report
Byju's allegedly hid $533 million in a hedge fund, according to lenders trying to recover the money
Edtech giant Byju’s, allegedly hid $533 million in an obscure three-year-old hedge fund, according to lenders trying to recover the cash, Bloomberg reported. The allegations are the latest twist in an increasingly public battle between Byju’s, and lenders who claim the $533 million is collateral for a $1.2 billion loan.
As per the Bloomberg report, the tech giant in 2022 transferred more than half a billion dollars to Camshaft Capital Fund, some Byju’s lenders claim in a lawsuit.
Investment firm Capital Fund was founded by William C. Morton when he was just 23 years old. Morton’s fund received the money despite an apparent lack of formal training in investing, according to the lenders, as cited by Bloomberg.
Meanwhile, Byju’s said it’s not a party to the Florida court proceedings and hasn’t been served with copies of the lawsuit.
Read Byju's full statement here
The Byju’s entities are not parties to these proceedings and have not been served with copies of the complaint or motion. This is the first that we are hearing of these proceedings
Additionally, we draw your attention to the Delaware court ruling in June this year, which rejected the lenders’ application for information in relation to the $500 million, a part of the funds received by BYJU'S Alpha, the borrowing entity under the TLB.
In any event, we wish to clarify that the Credit Agreement dated 24 November 2021 does not prohibit or restrict the movement or investment of monies disbursed thereunder. There is also no requirement for Byju’s to maintain cash as collateral. As a commercially prudent borrower, Byju’s Alpha has made investments in fixed income assets like any other large corporate treasury
The court filing appears to have been made prior to the latest loan repayment proposal. The parties continue to engage in negotiations to settle the dispute and we remain committed to an amicable outcome.
“Camshaft vigorously denies the statements made in Glas Trust Company’s” court filing, Camshaft lawyer David Massey said in an emailed statement, Bloomberg reported.
On September 11, Mint reported that Byju’s has put two of its businesses -- reading platform Epic and higher education platform Great Learning -- up for sale to pay off its term loan B lenders, three people with knowledge of the matter said on condition of anonymity. Byju's had acquired both assets during the peak of 2021 to build its $22 billion empire.
Byju’s was founded in 2015, Raveendran has attracted capital from some of the biggest investors in the tech world, including Mark Zuckerberg’s Chan Zuckerberg Initiative, Silver Lake Management, and Naspers Ltd. Byju’s was valued at more than $20 billion last year when it considered merging with a special-purpose acquisition company.
-With Bloomberg Inputs
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Business NewsCompaniesNewsByju’s allegedly hid $533 million in obscure hedge fund, claim lenders in lawsuit: Report
First Published:13 Sep 2023, 09:13 AM IST
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