In recent court documents, Camshaft revealed that it had managed $533 million for Byju’s Alpha, a U.S. branch of the Indian edtech conglomerate Byju’s. The funds were transferred to another wholly-owned U.S. subsidiary of Byju’s, thereby debunking claims that the Indian company had used Camshaft’s services to divert funds illicitly.
Details of the Fund Transfer
In the legal documents, Camshaft stated that the funds were moved to Inspilearn LLC, a Byju’s subsidiary based in Delaware. The wealth management firm also clarified that neither Byju’s nor any of its associated entities are limited partners in the hedge fund.
Byju’s Response to the Allegations
Byju’s confirmed to TechCrunch that Camshaft’s disclosure aligns with the Indian startup’s stance that it remained the beneficiary holder of the capital. The Credit Agreement it signed with the lenders did not dictate how it should use the funds, nor did it necessitate a specific amount to be kept as collateral, Byju’s further explained.
“The recent disclosure debunks false narratives about $533 million being illicitly diverted,” the startup stated.
Controversies Surrounding Byju’s
Last year, Camshaft Capital came under media scrutiny after lenders to Byju’s questioned the legitimacy of the wealth adviser, alleging that the $533 million was collateral for a $1.2 billion loan they had extended to the Indian startup. A handful of disgruntled investors in Byju’s later used this allegation to question the integrity of Byju’s founder, Byju Raveendran.
Byju’s, which had a valuation of $22 billion in early 2022, is also embroiled in a legal dispute with some of its shareholders in Bengaluru, its primary market. These shareholders have been trying to overturn a rights issue at the edtech group.
On a recent Saturday, Byju’s informed its employees that the startup had successfully raised new funds through the rights issue. However, a small group of investors “(4 out of the 150+ investors) have stooped to a heartless level, ensuring that we are unable to utilize the funds raised to pay your hard-earned salaries,” the company stated.
As a consequence, over 20,000 employees of Byju’s would not receive their salaries on time, Raveendran informed his staff.
Just last month, some shareholders voted to oust Raveendran from the edtech group. A day later, Raveendran reassured employees that he was still their CEO and questioned the legitimacy of the select investor group’s action.
