A federal judge in the USA has said that they will drop the arrest warrant for a Florida hedge fund manager, but only with a condition. If the hedge fund manager can assist the court in finding out the missing $533 million that edtech firm Byju’s allegedly tried to hide, This was first reported by Bloomberg.
During a court hearing on Tuesday in Wilmington, Delaware, US Bankruptcy Judge John Dorsey reportedly agreed to cancel an arrest warrant for William C. Morton, the founder of the Camshaft Fund.
According to court records, Byju's invested $533 million in loan proceeds with this fund last year. The funds were subsequently transferred to a UK lender and then to an unidentified non-US entity associated with Byju's. Lenders are attempting to use the bankruptcy case of a Byju's unit in the US to reclaim the money.
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Recently, lenders of the edtech company said that the US court was all set to impose a penalty on Riju Ravindran, the board member of Byju's, for failing to disclose or share the location of the term loan that amounts to $533 million.
Morton, who appeared in court via video conference from Dubai, was asked by the judge to return to the USA and meet the lawyers who are representing the lenders of Byju’s within ten days. Dorsey mentioned that he would reimpose the arrest warrant if the fund manager—who the court claimed had left the USA to avoid answering questions—fails to appear.
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Interestingly, Byju’s Alpha Inc., a bankrupt shell company affiliated with Think & Learn, is connected with the disputed funds. After a loan default, lenders took over this shell company.
Now, using the bankruptcy case of Alpha Inc., lenders are trying to recover the missing money from the edtech platform. Meanwhile, the edtech firm is already grappling in financial crisis, it is in a rift with its own investors. To add to it, the company, once valued at $22 billion, has seen a step-down in its valuation.
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