Byju Raveendran, the founding father of embattled ed-tech big Byju’s, is dealing with allegations of utilizing hid mortgage funds to try a buyback of a software program firm seized by a U.S. trustee. Based on a Bloomberg report citing courtroom filings, Raveendran’s actions had been half of a bigger effort to regain management of his struggling startup, which is embroiled in chapter proceedings in India and authorized disputes in the US.

The report claims Raveendran transferred tens of millions of {dollars} in mortgage proceeds to OCI Ltd, a UK-based logistics agency, regardless of asserting that the funds had been totally spent. These hidden funds allegedly fueled a scheme to purchase out U.S. collectors to whom Byju’s owes over $1.2 billion.

To execute this plan, Raveendran purportedly collaborated with Nebraska businessman and former political advisor William R. Hailer. The report reveals that Raveendran wired $11.25 million to Hailer’s firm, Rose Lake Inc., as an indication of his monetary functionality. Hailer allegedly deliberate to return the funds to Raveendran after they served their function of reassuring lenders.

Hailer was reportedly tasked with negotiating offers to settle money owed with the collectors. Nonetheless, collectors argue that Raveendran owes them $533 million in mortgage proceeds that had been diverted as a substitute of getting used for compensation.

Raveendran has denied any wrongdoing, asserting in earlier responses to comparable allegations that his actions had been needed countermeasures in opposition to what he described as overly aggressive ways by collectors. These collectors, he claims, are targeted on extracting cash from financially distressed corporations like Byju’s.

The authorized battle between Byju’s and its collectors has been ongoing for over a 12 months in each U.S. state and federal courts. In the meantime, in India, Byju’s faces insolvency proceedings, with a court-appointed skilled overseeing efforts to boost funds to repay the corporate’s money owed.

The controversy has intensified scrutiny on Byju’s monetary practices and the actions of its management, casting a shadow over the once-celebrated ed-tech startup.