BYJU’S Founders Accused in $533M Fraud Lawsuit by U.S. Unit Alpha

In a major legal escalation, BYJU’S Alpha—an American subsidiary of Indian edtech firm BYJU’S—has sued company founder Byju Raveendran, co-founder Divya Gokulnath, and advisor Anita Kishore, alleging they orchestrated the fraudulent transfer of $533 million. The lawsuit was filed on April 9, 2025, in the U.S. Bankruptcy Court for the District of Delaware and accuses the trio of siphoning off the loan proceeds without valid justification or transparency.

BYJU’S Alpha was initially created to receive funds from a $1.2 billion Term Loan B. However, it has since been seized by creditors and placed under Chapter 11 bankruptcy. This lawsuit follows a recent court ruling on February 28, where another key executive, Riju Ravindran, was found guilty of breaching fiduciary duties and enabling unauthorized fund transfers.

According to the filing, the three executives are alleged to have misled lenders and repeatedly misrepresented the whereabouts and purpose of the $533 million, making it nearly impossible for creditors to trace or recover the funds. The creditors claim the actions were deliberate and part of a coordinated attempt to withhold assets and shield them from legitimate recovery attempts.

BYJU’S Alpha and the lenders are now seeking damages, a full accounting of the transferred funds, and compensation for legal costs. They argue that the mismanagement and deception surrounding the funds caused severe financial damage and eroded trust in the firm’s leadership.

In response, BYJU’S founders have denied the accusations, calling them “baseless and part of a conspiracy” to take control of the company through unethical means. They claim the lawsuit is driven by GLAS, which they allege is an “illegitimate representative” of disqualified lenders.

The dispute further complicates BYJU’S ongoing financial woes. Once celebrated as India’s most valuable startup, the company is currently facing bankruptcy proceedings in both India and the U.S., with mounting scrutiny from investors and regulators. BYJU’S Alpha had defaulted on the credit agreement in 2022, shortly after receiving the loan, and the fallout has only intensified since.

The latest lawsuit adds to the growing legal pressure on BYJU’S leadership amid claims of financial irregularities and lack of corporate governance. With more court actions expected, the outcome of this case could play a crucial role in determining the future of the once high-flying edtech giant.