The chief content officer of struggling edtech company Byju’s, along with an associate of its founder, is facing financial sanctions in the US over their involvement in siphoning software, cash, and other assets from businesses under court supervision.
A federal judge is considering imposing millions of dollars in sanctions on Vinay Ravindra, Byju’s manager, and Rajendran Vellapalath, a company ally and founder of the Dubai-based tech startup Voizzit Technology, according to a Bloomberg report.
During a court hearing on Tuesday, US Bankruptcy Judge John T. Dorsey indicated he would issue an "order to show cause," compelling the two executives to explain their actions or face contempt of court charges and significant financial penalties, as per the report.
Lenders owed over $1.2 billion are pushing to liquidate US education software companies that Byju’s acquired for $820 million a few years ago. Byju’s, founded by the controversial entrepreneur Byju Raveendran and his family, is currently in bankruptcy in India after defaulting on debt owed to US lenders.
Last month, Nebraska businessman William Hailer testified that he spent months assisting Raveendran in efforts to regain control of Byju’s US software companies, which are currently being managed by a court-appointed trustee. However, the effort failed, leading Hailer to part ways with Raveendran and accusing him of unethical business practices.
Lenders are urging the US judge to penalise Ravindra, Vellapalath, and his company, Voizzit, for taking control of the cloud-based accounts of US companies Epic! Creations and Tangible Play. They allege the executives drained over $1 million in cash, along with valuable internet platforms and other assets used by students.
Neither Vinay Ravindra nor a representative for Byju’s responded to requests for comment via email from Bloomberg.