Byju's allegedly hid $533 million in obscure hedge fund, claim lenders in lawsuit: Report

livemint.com:

Edtech giant Byju’s, allegedly hid $533 million in an obscure three-year-old hedge fund, according to lenders trying to recover the cash, Bloomberg reported. The allegations are the latest twist in an increasingly public battle between Byju’s, and lenders who claim the $533 million is collateral for a $1.2 billion loan. As per the Bloomberg report, the tech giant in 2022 transferred more than half a billion dollars to Camshaft Capital Fund, some Byju’s lenders claim in a lawsuit.

Investment firm Capital Fund was founded by William C. Morton when he was just 23 years old. Morton’s fund received the money despite an apparent lack of formal training in investing, according to the lenders, as cited by Bloomberg. Meanwhile, Byju’s said it’s not a party to the Florida court proceedings and hasn’t been served with copies of the lawsuit.

The Byju’s entities are not parties to these proceedings and have not been served with copies of the complaint or motion. This is the first that we are hearing of these proceedings Additionally, we draw your attention to the Delaware court ruling in June this year, which rejected the lenders’ application for information in relation to the $500 million, a part of the funds received by BYJU'S Alpha, the borrowing entity under the TLB. In any event, we wish to clarify that the Credit Agreement dated 24 November 2021 does not prohibit or restrict the movement or investment of monies disbursed thereunder. There is also no requirement for Byju’s to maintain cash as collateral. As a commercially prudent borrower, Byju’s Alpha has made investments in fixed income assets like any other large corporate treasury The court filing appears to have been made prior to the latest loan repayment proposal. The