Missing funds went to legitimate purpose, says Byju's founder

The founder of Byju's, a once high-flying Indian education company that defaulted on its US debts, denied that he orchestrated a scheme to fraudulently transfer $533 million away from lenders.

On the day a judge is considering the lenders' fraudulent transfer claims against his company, Byju Raveendran outlined for the first time in court his explanation for what happened to the money, which lenders have been trying to track down for more than a year.

The company got the $1.2 billion loan nearly three years ago as it planned to use most of the proceeds on an international expansion, Raveendran claimed. More than $200 million raised with the loans was spent for marketing, including sponsoring soccer's FIFA World Cup in Qatar in 2022 and to secure star player Lionel Messi as brand ambassador. Almost $300 million were spent to fund losses for Tangible Play businesses.

“However, just as we were poised to see the returns on these strategic investments, we were hit by a liquidity crunch,” he said in a filing Wednesday morning in US Bankruptcy Court in Wilmington, Delaware.

Commercial purpose