Byju’s $533M Funds: Legal Transfer Confirmed Amid Controversy
Camshaft Capital has clarified in recent court filings that $533 million managed for Byju’s Alpha—a U.S. unit of the Indian edtech giant—was lawfully transferred to another fully owned U.S. subsidiary, Inspilearn LLC. This disclosure counters allegations that Byju’s misused funds or engaged in financial misconduct.
Key Developments in the Case
- Funds Transferred Legally: Camshaft confirmed the capital was moved to Inspilearn LLC, a Delaware-based Byju’s subsidiary, maintaining transparency in the transaction.
- No LP Involvement: The filings explicitly state that neither Byju’s nor its affiliates are limited partners in Camshaft’s hedge fund.
- Byju’s Statement: The company asserts that the funds were always under its beneficial ownership, emphasizing that lender agreements did not restrict their use or require collateral retention.
Background of the Dispute
The controversy began when lenders questioned Camshaft’s role, alleging the \(533 million served as collateral for a \)1.2 billion loan. Critics, including a faction of Byju’s investors, leveraged these claims to challenge founder Byju Raveendran’s integrity.
Broader Legal and Financial Challenges
Byju’s, once valued at $22 billion, faces mounting hurdles:
- Shareholder Disputes: Investors in Bengaluru are contesting a recent rights issue, seeking to overturn it.
- Salary Delays: Over 20,000 employees experienced delayed payments after funds from the rights issue were frozen due to investor disputes.
- Leadership Turmoil: Shareholders voted to remove Raveendran as CEO, though he maintains his position, calling the move illegitimate.
Byju’s Defense
The company has dismissed allegations of fund diversion as “fake narratives,” stressing compliance with contractual terms. As legal battles and internal conflicts persist, Byju’s future remains uncertain amid its efforts to stabilize operations and regain stakeholder trust.
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