US court holds Byju Raveendran in contempt for ignoring bankruptcy orders

The US bankruptcy court has held Byju’s founder and CEO, Byju Raveendran, in contempt for failing to follow its orders in the ongoing case involving the company’s US unit, Byju’s Alpha.

According to an ET report, the Delaware court stated that Raveendran failed to produce key documents and missed multiple deadlines despite receiving repeated warnings. The court has imposed a fine of $10,000 per day until he cooperates with the investigation.

This move adds to the growing legal and financial troubles for the edtech firm, which is under pressure from its lenders over the alleged diversion of $533 million. The money was part of a $1.2 billion term loan raised by Byju’s Alpha, which filed for bankruptcy earlier this year.

Lenders, including Redwood and Silver Point, have claimed that the funds were moved to a little-known hedge fund called Camshaft Capital without proper disclosure. They are now trying to recover the money and hold the company’s leadership accountable.

Raveendran has told the court he couldn’t attend hearings due to legal proceedings in India and Dubai, and a travel ban in the UAE. However, the court said he still had to comply with its orders.

The contempt order could lead to more serious action if Raveendran continues to delay. It also raises concerns about Byju’s ability to manage its legal challenges, especially in global jurisdictions.

Once one of India’s most valuable startups, Byju’s is now dealing with mounting debt, investor exits, governance issues, and falling revenues. The US court’s action adds another layer of pressure on the company’s efforts to rebuild trust and restructure its operations.