BYJU'S accused of hiding $533 million from lenders
In a startling turn of events, edtech giant BYJU'S has been accused by lenders of hiding a substantial sum of $533 million in a little-known hedge fund named Camshaft Capital Fund, per Bloomberg. Lenders are seeking to recover this concealed cash, and the case has taken an intriguing twist, involving luxury cars and questionable investment expertise.
BYJU'S secretly transferred half a billion dollars
During the past year, BYJU'S reportedly transferred over $500 million to Camshaft Capital Fund, an investment firm founded by William C. Morton at the young age of 23. What's raising eyebrows is the fact that Morton had no formal training or background in the field of investing. This lack of financial expertise has sparked concerns and questions about the nature of this large financial transaction.
Hedge fund founder's luxury car collection
Adding to the intrigue, legal documents reveal that after this sizable transfer, luxury cars such as a 2023 Ferrari Roma, a 2020 Lamborghini Huracán EVO, and a 2014 Rolls-Royce Wraith were registered under Morton's name. These allegations have arisen during an ongoing dispute between BYJU'S and lenders. The lenders claim that the $533 million is collateral for a $1.2 billion loan, while BYJU'S accuses the lenders of predatory tactics, leading to accusations of loan default from both sides.
BYJU'S negotiates loan buyback amid scandal
BYJU'S is working to strike a deal with its creditors and has proposed buying back the loan in six months, a move that relies on selling some of its overseas assets to private equity and strategic investors. BYJU'S denies any connection to the Florida court case and claims not to have received copies of the lawsuit. Surprisingly, Glas Trust, representing the creditors, hasn't informed Camshaft about the lawsuit, keeping the hedge fund unaware of the legal dispute.
An IHOP as a business address
What further baffles observers is Camshaft Capital Fund's apparent association with an IHOP pancake restaurant in Miami. In a 2020 Securities and Exchange Commission filing, Camshaft listed its primary business address as 285 NW 42nd Ave, currently home to an IHOP in Miami's Little Havana district. This unconventional location for a hedge fund raises doubts about Camshaft's legitimacy. An employee working there for a decade claimed to have never heard of Morton, Camshaft Capital Fund, or BYJU'S, further fueling doubts.
A condo at the Porsche Design Tower
That's not all. An entity linked to Camshaft listed a luxurious oceanfront condo at the Porsche Design Tower in Sunny Isles Beach as its business address. This location is a far cry from the IHOP in Miami and suggests that Camshaft may have multiple identities or is engaged in activities beyond traditional hedge fund operations. The shifting business addresses add another layer of complexity to the case.
BYJU'S defense
The central issue in this legal battle remains the missing $533 million. Glas Trust, the lenders' agent, gained control of the BYJU'S unit that issued the debt but found the cash had mysteriously disappeared. BYJU'S, in its defense, claims it was safeguarding the money from predatory lenders and had the right to transfer it under the loan agreement. The company further alleges that lenders are seeking to take over the entire ed-tech empire led by Byju Raveendran.
