According to reports, a US court has issued a default judgment against the founder of Byju's, Byju Ravindran. The order was pronounced on a petition by Byju's Alpha and US-based lender GlassTrust Company LLC. The US court ordered Ravindran to pay a total amount of $1 billion to the petitioners. The Delaware Bankruptcy Court released the judgment on November 20. The judgment says that issuance of a default judgment was done in reaction to ignoring and violation of the earlier discovery orders by Ravindran.
Byju's had set up Byju's Alpha in 2021 to raise money from lenders overseas. It secured a term loan of $1 billion through the unit. In turn, lenders accused Byju's Alpha of siphoning off $533 million outside the United States without its prior approval for allegedly breaching the loan condition. GlassTrust approached the Delaware court with these allegations. The court allowed GlassTrust then to take over Byju's Alpha. Following this, Byju's Alpha and GlassTrust went back to the court over the contentious $533 million dollars that prompted the court to insist on comprehensive financial disclosures.
The court ruled that Ravindran, knowing full well what the requirements for discovery were, simply decided to disregard them. It said he simply never answered, and he never conformed to a number of orders on record. It drew the inference from this that he did so deliberately. After due deliberation, default judgment was ordered for these reasons.
A court ordered payment of $533 million linked to Byju's Alpha and an additional $540.6 million tied to interest on a hedge fund called Camshaft. The court asked for a complete accounting by Ravindran of Alpha's use of the funds and ordered complete books and records of it. Ravindran objected to the ruling and said he will appeal. Lawyers for Byju's said that the judge did not allow them to argue their case before issuing the ruling.
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