Camshaft claims that a Byju’s unit is the beneficial owner of $533 million in funds

In recent court filings, Camshaft disclosed that the $533 million it managed for Byju’s Alpha, a U.S.-based unit of Indian edtech giant Byju’s, was transferred to another wholly-owned U.S.-based subsidiary of Byju’s, Inspilearn LLC. This revelation rebuts allegations that Byju’s misappropriated funds through the wealth manager’s services.

Camshaft clarified that Byju’s or any of its entities are not limited partners in the hedge fund. Byju’s stated that Camshaft’s disclosure aligns with its position that it remained the beneficiary holder of the capital. Byju’s emphasized that the Credit Agreement it signed with lenders did not specify how the funds should be utilized or require a specific collateral amount to be maintained.

The startup hailed the latest disclosure as dispelling false narratives regarding the alleged misappropriation of $533 million. Last year, Camshaft Capital attracted attention when lenders of Byju’s questioned the legitimacy of the wealth advisor, claiming the $533 million as collateral for a $1.2 billion loan provided to the Indian startup. Certain estranged investors in Byju’s later used these allegations to cast doubt on founder Byju Raveendran’s credibility.

Byju’s, valued at $22 billion in early 2022, is currently embroiled in a legal dispute with certain shareholders in Bengaluru seeking to nullify a rights issue within the edtech company.

In a communication to employees on Saturday, Byju’s revealed that it had successfully secured new funds through the rights issue. However, the startup lamented that a small group of investors (only 4 out of over 150 investors) had taken actions preventing the utilization of the raised funds to pay employee salaries. Consequently, more than 20,000 Byju’s employees would experience delays in receiving their wages, CEO Byju Raveendran informed the staff.

The backdrop to this financial turbulence includes recent attempts by certain shareholders to oust Raveendran from his leadership position within the edtech firm. Despite these challenges, Raveendran affirmed his status as the company’s chief executive in a communication to employees last month, questioning the legitimacy of the actions undertaken by the select group of investors.