Byju’s accused of hiding $533M in Miami IHOP-linked hedge fund

There seems to be no end to the troubles being faced by Byju's, which was once a highly valued startup.

The edtech company is now facing allegations of concealing $533 million within an obscure hedge fund. This fund had previously listed its principal business address as a Miami IHOP pancake restaurant. These accusations have surfaced through a lawsuit filed by the company's lenders.

Lenders allege, that the investment firm, Camshaft Capital Fund, was founded by William C. Morton when he was just 23 years old and received more than half a billion dollars from Byju's despite an apparent lack of formal training in investing .

The allegations have been made by lenders who are trying to recover the cash, which they claim is collateral for a $1.2 billion loan. The two sides have been trading accusations about the loan, with lenders claiming it is in default and Byju’s accusing lenders of predatory tactics.

The allegations are the latest twist in an increasingly public battle between Byju’s and its creditors. Meanwhile, Byju’s is trying to strike a deal with creditors and this week made a surprise proposal to buy back the loan within six months. To bankroll that repayment, it’s in talks to sell some of its overseas assets to private equity and strategic investors.

The allegations have raised questions about the transparency and accountability of Byju’s financial dealings. The company has been under scrutiny since it raised $1 billion from investors last year at a valuation of $16.5 billion, making it one of India’s most valuable startups.

Byju’s has denied the allegations and said that it has not been served with copies of the lawsuit. The company has also said that it is not a party to the Florida court proceedings.