Byju’s Alpha Inc has alleged that a London-based company that once managed Byju’s financial solutions and one of its senior employees “actively planned, facilitated and effectuated” the disappearance of USD 533 million from a USD 1.2 billion loan.
On Monday, May 5, Byju’s Alpha Inc filed a case in the US Bankruptcy court in Delaware against UK-based OCI Limited and its India and Southeast Asia structuring division head, Rupin Banker. The case accuses them of planning and executing fraud that led to the disappearance of USD 533 million.
After Alpha Inc defaulted on the USD 1.2 billion loan, an American court appointed a trustee who took over the management of the company from Riju Raveendran. Riju is the brother of Byju Raveendran, who founded the edtech company Byju’s (Think and Learn Pvt Ltd). Alpha Inc was a special purpose financial vehicle formed to take out the term loan. The present case has been filed by Alpha Inc, which is no longer under control of Byju Raveendran or his associates.
According to court documents, Byju’s Alpha Inc said, “…it is readily apparent that OCI and Banker were more than mere participants in those breaches—they actively planned, facilitated, and effectuated the scheme that lies at the heart of this case with full knowledge of the fraud. OCI must be held accountable for the significant damage it has caused the Debtor and its estate.”
The Delaware Bankruptcy court has issued summons to OCI and Rupin Banker and given them two weeks to respond.
TNM had how USD 533 million went missing from a USD 1.2 billion term loan that Byju’s, once India’s most valued ed-tech startup, had taken out in November 2021. The money had been borrowed from a US-based consortium of 37 lenders that is represented by Glas Trust.
Through multiple transactions, money was first transferred to Camshaft Capital, an alleged sham hedge fund that operated out of a pancake outlet in Miami. It was then transferred to OCI Limited, a London-based “commercial process outsourcing” company. OCI was responsible for managing financial solutions and expenditures for Byju’s. This included advertising expenses for the FIFA World Cup in Qatar, court filings show.
Rupin Banker, whose family hails from Manguluru and later moved to Mumbai, was the structuring division head for OCI and was responsible for the firm’s operations in India and Southeast Asia. Rupin has a string of criminal cases against him, both in India and the Middle East. He played a key role in facilitating the movement of funds from Camshaft to OCI.
Glas Trust, a representative of the consortium of lenders, called the complicated nature of the financial transactions “deceptive.” Glas Trust’s lawyer told the court that Byju’s actually owed the money to OCI and that the Camshaft transactions were carried out to conceal the USD 533 million in its accounts.
“Byju’s intended to take the $533 million, potentially apply it towards debts, unknown debts, that it owed to a British supply chain company called OCI, and then call all that an asset on its books and records,” Glas Trust’s lawyer had alleged in October last year.
In the new case filed on Monday, Alpha Inc, which is now under court-appointed trusteeship, argued that if OCI had needed funds for procurement, then “the Debtor (Alpha Inc.) could have wired the Alpha Funds directly to OCI. The Debtor did not need to first involve Camshaft.”
The court filing also goes into details of Rupin’s criminal past and adds that OCI, like Camshaft, seemed like a sham operation. “Of its eight purported offices outside of London, investigators were able to visit six, each time finding no one from OCI present… Former OCI staff and contractors criticised OCI for falsely portraying contractors as permanent employees and, in certain cases, as senior executives,” the filing said.
