The founder of bankrupt Indian tech firm Byju’s tried to use loan money he allegedly hid from US lenders to secretly buy back a software company that was bought by an American, according to a new court filing. The trustee had taken it into his possession.
Byju Raveendran is trying to regain control of his vast education technology empire, which faces court scrutiny in both India, where the parent company is based, and the US, where some of its valuable units are located, according to a court declaration filed by Nebraska. Is under surveillance. Businessman William R. Heller.
Raveendran allegedly recruited Heller, a former political consultant, to try to buy out more than $1.2 billion worth of debt owed to US creditors, according to filings in the US bankruptcy court in Delaware. Raveendran could then swap that loan, which was trading at about 0.24 cents on the dollar as of Wednesday evening, for ownership of Epic!, an education-software firm. The plan ultimately failed.
“For the past several months, I have been used as a pawn by Byju’s to manipulate the law,” Heller wrote in her testimony. Heller is set to testify in federal court on Thursday on behalf of a trustee who plans to sell Epic! To raise funds for Byju’s lenders, including US lenders.
A representative for Byju’s and a lawyer for Raveendran did not respond to requests for comment.
Raveendran has denied wrongdoing in previous responses to the lender’s allegations, saying his actions were an appropriate response to overly aggressive tactics used by lenders that specialize in squeezing money out of distressed companies.
This summer, when Heller began negotiations with lenders, Raveendran wired $11.25 million to a company Heller ran called Rose Lake Inc. Heller was to use the cash to prove to lenders that he was well funded. The money was then to be returned to Raveendran, Heller said.
According to Heller’s court filings, the money came from U.K.-incorporated logistics firm OCI Ltd., which had received millions of dollars in loans that U.S. lenders are trying to reclaim.
Heller said he tried unsuccessfully to gather evidence that OCI still had money from Byju’s, although Raveendran claimed all the cash had been spent. Heller said that for several months he spoke regularly with Raveendran and other Indian business people involved in Byju’s empire. Heller also visited Raveendran’s family compound in Dubai for talks with investors who were reportedly supporting Raveendran’s attempt to gain control of Byju’s.
Lenders have been fighting Byju’s in US state and federal courts for more than a year. The lenders claim that Raveendran hid $533 million of loan proceeds that should have been repaid to the lenders. In India, Byju’s is facing bankruptcy proceedings, where a court-appointed professional has been tasked with raising funds to repay lenders.
The affair is epic! Creations, Inc., 24-11161, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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