Byju’s in Hot Water Over $533 Million Mess
MUMBAI, India — Byju's, one of India's most high-profile edtech companies, is in hot water as of March 5, 2025, for reportedly sending $533 million to a sketchy hedge fund. U.S. lenders say the cash disappeared from a Byju's subsidiary called Alpha in an apparent fraud. They allege it's part of a scheme to avoid a $1.2 billion debt.
What Happened to the Money?
The trouble began when Byju’s borrowed $1.2 billion from U.S. lenders in 2021. By 2023 the company was missing payment deadlines. Lenders seized Byju’s Alpha and forced it into bankruptcy. They allege that $533 million was transferred to Camshaft Capital, a small hedge fund based in Miami, in early 2023. On February 28, 2025, a U.S. court found this transfer fraudulent.
The cash was used to meet real business needs, says Byju’s founder, Byju Raveendran. But the court didn’t buy it. Judge John T. Dorsey referred to Camshaft as a “sham” fund managed by a 23-year-old with “no training.” The fund’s address used to be an IHOP restaurant, lenders say. That raises huge questions about the actual disposition of the money.
A Rocky Road for Byju’s
Byju’s was once a star, valued at $22 billion in 2022. It expanded rapidly during the pandemic, teaching children online. But things turned sour. Now the company is dealing with audits and raids and legal battles. It is also in Indian insolvency proceedings. The $533 million mess adds to its woes and consumes courts in Delaware and Mumbai.
The lenders, among them Glas Trust, have battled for more than a year to raise the cash. They are alleging that Byju’s, Raveendran’s brother Riju and Camshaft concealed it intentionally. “We’re pleased the court saw through this fraud,” a spokesman for Glas Trust said. The ruling is a win for them, but the money is still missing.
Legal Heat Turns Up
And the U.S. bankruptcy court didn’t just call it fraud. It also imposed a $10,000-a-day fine on Riju Ravindran until he helps track down the money. He’s a former Byju’s director and a party to the case. The court said he had breached his duty to act fairly. Meanwhile, Camshaft’s founder, William Morton, has an arrest warrant out for evading questions.
In India, Byju’s faces worse trouble. The company owes cricket board fees, and tax officials are claiming $101 million. Its apps, which made it roughly $1 million a month, were improperly transferred from lenders’ control, a judge ruled last year. Each move is making it feel like the edtech giant is digging itself deeper.
What’s Next for Byju’s?
This $533 million scandal threatens to drag Byju’s further into chaos. The court victory gives lenders some leverage, but cash recovery isn’t assured. If not, they could be more aggressive in India’s insolvency proceeding. That might involve selling Byju’s assets to settle debts.
For Raveendran, the pressure is on. He has denied any wrongdoing, but the rulings present a bleak picture. The company’s fate depends on what happens next in courts. Will it recover or will it die? And investors — as are parents and students — are paying close attention. The stakes are high, and time’s running out.
Analysts say this might rattle confidence in India’s startup scene. Edtech was a bright spot, but the fall of Byju’s reveals risks. Lenders may balk at funding big dreams. For now, tracking that $533 million is the focus. Until then, Byju’s remains the center of attention for all the wrong reasons.
References:
- Business Insider: Byju’s $533 Million Transfer Ruled Fraudulent
- Reuters: U.S. Court Finds Byju’s Guilty of Fraud
- The Times of India: Byju’s Defrauded Lenders, Court Says
- Bloomberg: Byju’s Hedge Fund Scandal Deepens
- Business Standard: Byju’s Faces Mounting Legal Woes