Bengaluru/IBNS: Byju Raveendran, the founder of the bankrupt Indian edtech company Byju’s, allegedly attempted to use hidden loan funds to secretly buy back a US-based software company under the control of an American trustee, according to new court filings. 

The court declaration, filed by Nebraska businessman William R. Hailer, details Raveendran’s ongoing efforts to regain control of his crumbling education technology empire, which is under court supervision in both India and the US. 

Hailer, a former political consultant, alleged that Raveendran enlisted him to negotiate with US creditors owed more than $1.2 billion.

The plan involved acquiring their debt—trading at just 24 cents on the dollar—and converting it into ownership of Epic!, a US-based education software company owned by Byju’s.

However, the strategy ultimately failed. 

“Over the last several months, I have been used as a pawn in Byju’s manipulation of the law,” Hailer stated in his testimony.

He is scheduled to testify in federal court on Thursday, supporting a trustee’s plan to sell Epic! to recover funds for Byju’s creditors, including US-based lenders.

Court documents revealed that Raveendran transferred $11.25 million to Rose Lake Inc., a company controlled by Hailer, as part of the buyback scheme.

The funds, which were meant to demonstrate financial backing to lenders, were reportedly returned to Raveendran. 

Hailer claimed the money originated from OCI Ltd., a UK-registered logistics firm that allegedly received hundreds of millions of dollars in loan proceeds from Byju’s.

US creditors have been pursuing these funds, claiming Raveendran misused $533 million in loan proceeds meant for debt repayment. 

Hailer stated that he was unable to confirm whether OCI still held funds for Byju’s, despite Raveendran’s assertion that all the money had already been spent.

Hailer also described his frequent interactions with Raveendran and other Indian business associates, as well as a visit to Raveendran’s family compound in Dubai to discuss the buyback effort with potential investors. 

Byju’s has been embroiled in legal battles with lenders in both US state and federal courts for over a year.

In India, the company faces insolvency proceedings, with a court-appointed professional overseeing efforts to raise funds and repay creditors. 

Raveendran has previously denied any wrongdoing, characterising his actions as a justified response to aggressive tactics by creditors specialising in distressed debt recovery. 

Both Byju’s and Raveendran’s legal team have declined to comment on the latest allegations. 

The US trustee overseeing Byju’s assets, including Epic!, plans to proceed with a sale to recover funds for creditors, marking another setback for Raveendran’s attempts to regain control of his beleaguered edtech empire.