BYJU’S founder Byju Raveendran plans to file a defamation lawsuit against the troubled edtech startup’s consortium of lenders, Glas Trust, and the resolution professional (RP) in the next 30 days.

In a statement, Raveendran said that the suit will seek damages to the tune of $2.5 Bn from the two entities as well as other individuals who participated in a “coordinated conspiracy” against the founder.

The beleaguered founder also claimed that he possessed new evidence that disproved Glas Trust’s allegations that $533 Mn worth of funds from the company’s US subsidiary, BYJU’S Alpha, were diverted by the founders.

Raveendran claimed that the said evidence would be presented alongside a new motion before the Delaware Bankruptcy Court to “correct” the US Court’s recent judgement.

Just last week, the bankruptcy court, in a default ruling, directed Raveendran to pay $1.07 Bn, noting that the founder had refused to cooperate with legal efforts to locate $533 Mn worth of proceeds from a $1.2 Bn term loan B (TLB), which was raised by the edtech startup in 2021.

Terming the order a “premature damages determination”, he argued that the court mistakenly included a damages award as part of a sanction order for delayed document production. He also alleged that Glas Trust had withdrawn its request for a damages ruling in September and the liability was not decided on the merits.

In a statement, Raveendran also claimed that the Court did not give him the requisite 30 days he had sought to arrange a US attorney to argue the case. The founder added that he will appeal the order and will bring a $2.5 Bn damages suit against Glas Trust and the RP.

Citing his “evidence”, Raveendran claimed that the entire $533 Mn is fully accounted for. Elaborating on this, he said that the majority of the proceeds, $475 Mn, was routed from the loan arranger, OCI, to Revere Capital and then to entities linked to BYJU’S. Finally, he said, the capital landed at the edtech’s parent entity Think & Learn Pvt. Ltd. (TLPL).

As per him, the funds were utilised for fuelling the company’s expansion.

“For two years, Glas Trust has attacked my integrity and the other founders by repeating a story they knew was false. Today, their own documents expose the truth. The funds were used for the benefit of Think & Learn and our impressive expansion… These parties will now be brought before the Courts and be required to answer some very tough questions,” said Raveendran.

The beleaguered founder also claimed that lender Glas Trust and the company’s RP had full visibility into the structure, routing and transfer of the $533 Mn funds from Alpha’s coffers to TLPL.

According to Raveendran, this visibility contradicted the lender’s statement that it did not know where the money went.

At the heart of the matter is the $1.2 bn TLB loan raised by BYJU’S in 2021. The creditors later alleged the company violated the terms of the loan and $533 Mn out of the total debt was moved out of the US illegitimately.

Subsequently, Glas Trust moved the US Court and received a favourable order to take control of BYJU’S Alpha. Last week, the Delaware Bankruptcy Court issued a default judgment, which directed Raveendran to pay $533 Mn and an additional amount of over $540 Mn.

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