Byju’s Unit Declared Beneficial Owner of $533 Million Funds by Camshaft

Camshaft recently made a disclosure in court documents that has generated quite a bit of buzz. The wealth management firm revealed that approximately $533 million it was managing for Byju’s Alpha, a United States-based subsidiary of India’s leading edtech company Byju’s, had been transferred to another 100% U.S.-based subsidiary. This move effectively disproves allegations that the Indian firm had used Camshaft’s services to inappropriately take control of the funds.

In the court filings, Camshaft stated that the capital had been transferred to Inspilearn LLC, a Delaware-based subsidiary of Byju’s. Additionally, the firm clarified that neither Byju’s nor any of its entities are limited partners in their hedge fund.

Byju’s issued a statement, saying that Camshaft’s disclosure is consistent with their position that they were the intended recipients of the capital. The company also explained that the Credit Agreement they had signed with their lenders did not specify how the funds were to be used, nor did it require a specific amount to be kept as collateral.

“The latest disclosure effectively rebuts any false claims of $533 million being improperly diverted,” said a spokesperson for Byju’s.

The allegations surrounding Camshaft Capital began in 2021 when lenders of Byju’s raised concerns about the legitimacy of the wealth management firm. They claimed that the $533 million was supposed to serve as collateral for a $1.2 billion loan that had been extended to the Indian startup. Some estranged investors of Byju’s then used this accusation to call into question the credibility of the company’s founder Byju Raveendran.

Despite being valued at $22 billion in early 2022, Byju’s is currently caught up in a legal battle with some of its shareholders in Bengaluru. These particular shareholders have been attempting to revoke a rights issue at the edtech company.

Over the weekend, Byju’s informed employees that they had successfully raised new funds through their rights issue, but a specific group of investors, “just 4 out of the 150+ investors,” according to Raveendran, were preventing them from accessing the funds to pay their employees’ salaries on time.

“As a result, more than 20,000 employees of Byju’s will not receive their salaries on schedule,” wrote Raveendran in a letter to employees.

Last month, a group of shareholders voted to remove Raveendran from his role as the company’s CEO. The following day, Raveendran reassured employees that he remained their chief executive and questioned the legitimacy of the actions taken by the select group of investors.