Byju’s founder Byju Raveendran, is at the center of yet another set of allegations involving hidden funds, financial mismanagement, and attempts to manipulate creditors to regain control of key assets.
The allegations center around Raveendran’s attempts to recover Epic!, which Byju’s had acquired in 2021 but lost control of amidst its financial struggles. According to media reports, Raveendran recruited Nebraska businessman William R. Hailer, a former political consultant, in a plan to settle debts owed to U.S. creditors by purchasing distressed loans at significantly discounted rates.
These loans, reportedly trading at around 24 cents on the dollar, amounted to over $1.2 billion. The alleged aim was to swap the acquired debt for ownership of Epic! and effectively circumvent the claims of the creditors, which would restore Raveendran’s control over the software company, which Byju’s had acquired in 2021.
Hailer further added that Raveendran has transferred $11.25 million to Rose Lake Inc., a company he managed, as part of the scheme. These funds were allegedly intended to demonstrate financial solvency to U.S. creditors, with the understanding that the money would be returned to Raveendran after negotiations. However, Hailer’s filing reveals that these funds originated from OCI Ltd., a UK-based logistics firm that had reportedly received hundreds of millions of dollars from Byju’s loan proceeds—money that creditors claim has not been accounted for. He will be testifying in federal court on Thursday on behalf of a trustee.
Hailer, a former political consultant, described himself as a pawn in Raveendran’s alleged manipulation of legal processes. “Over the last several months I have been used as a pawn in Byju’s manipulation of the law,” Hailer said. His interactions with Raveendran reportedly included visits to Dubai, where meetings were held with potential investors at the Raveendran family compound, and Hailer alleges that discussions occurred with investors backing Raveendran’s efforts to reacquire Epic!. For his part, Raveendran continues to deny any wrongdoing.
The financial crisis that Byju’s is currently dealing with has already resulted in simultaneous bankruptcy and insolvency proceedings in the US and India, respectively. In the US, creditors are seeking to reclaim hundreds of millions in loan proceeds that have been allegedly hidden by Raveendran. The Delaware bankruptcy court has become the primary battleground for these disputes. Things are hardly better in India, where the National Company Law Tribunal (NCLT) is overseeing Byju’s insolvency case and a court-appointed professional is tasked with raising funds to repay the company’s debts. Recent developments include the NCLT blocking Byju’s subsidiary Aakash Educational Services from amending its Articles of Association.
