Crisis deepens: Byju's founder alleges conspiracy as legal battles mount

Byju Raveendran, the founder of embattled Indian edtech giant Byju's, has escalated the company's legal woes by filing a police complaint. He accuses former insolvency resolution professional (RP) Pankaj Agrawal and several EY executives of orchestrating a "criminal conspiracy" to sabotage Byju's.

This accusation follows a whistleblower's LinkedIn post suggesting EY sided with Byju's US lenders' trustee, Glas Trust, against the edtech firm's interests.

In a post on X, Raveendran alleged that Agrawal “illegally handed over” the insolvency process to Dinkar, Rahul, and Lokesh from EY, calling them “agents of GLAS.” He declared, “I am not a flower; I am the fire that will shatter GLAS,” in a statement that quickly gained attention online. Raveendran also urged EY Chairman Rajiv Memani to suspend the executives and claimed to have “tons of proof” to support his allegations.

This follows a video Raveendran posted, alleging that individuals were caught conspiring to fabricate fraud accusations against him.  

He declared his intent to "shatter GLAS" and urged EY Chairman Rajiv Memani to suspend the implicated executives, asserting he possesses substantial proof. This development comes shortly after Raveendran shared a video alleging a conspiracy to fabricate fraud accusations against him.

Glas Trust responds to allegations

Glas Trust rejected Raveendran’s accusations, calling them “baseless and fabricated,” according to media reports.

A spokesperson for Glas Trust stated that Raveendran was attempting to deflect responsibility after a judicial process placed his company, Think & Learn (Byju’s parent), into insolvency proceedings. The statement reiterated that Glas Trust and EY had been reinstated through court orders.

New lawsuit filed in the US

In a separate legal development, Byju’s Alpha (a financing arm of Byju’s) filed a lawsuit in a US court, accusing Raveendran, his wife Divya Gokulnath, and top advisor Anita Kishore of unlawfully diverting $533 million from the company. The lawsuit follows a Delaware Bankruptcy Court ruling and alleges that the funds were hidden or misused through a fraudulent scheme.

The lenders behind the lawsuit claim that Byju and his associates engaged in deceptive conduct and breached fiduciary duties, obscuring the whereabouts of the funds. The legal action seeks damages for various misconducts, including breach of fiduciary duty, civil conspiracy, and aiding and abetting.

Financial troubles and legal struggles

Byju’s financial collapse began with a $1.2 billion loan default, leading to insolvency proceedings. Lenders, represented by Glas Trust, approached the National Company Law Tribunal (NCLT) to recover Rs114,320 million. The NCLT ruling granted lenders control over Byju’s finances, which Raveendran contested, citing a separate dispute with the BCCI.

In the US, Byju’s faces bankruptcy proceedings. A court recently found that a senior executive hid $533 million from lenders, and creditors are seeking to liquidate Byju’s US assets.

Byju’s decline from $22 billion valuation

Once valued at $22 billion in 2022, Byju’s is now embroiled in legal battles and financial turmoil, including unpaid debts, lawsuits, and operational challenges. Raveendran’s attempts to signal a comeback, such as his “Broke, not broken” message, have received mixed reactions.

Byju’s U.S. bankruptcy case is listed under BYJU’s Alpha Inc., Case No. 24-50013, in the U.S. Bankruptcy Court, District of Delaware.