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Written by Dietrich Knaut
NEW YORK (Reuters) – A U.S. bankruptcy judge on Thursday ordered the arrest of hedge fund manager William Cameron Morton on suspicion of helping Indian education technology startup Byju’s hide $533 million from lenders. .
Byju’s Alpha, Byju’s financier-controlled subsidiary, filed for bankruptcy in the US in February after the Bangalore-based startup defaulted on $1.2 billion in debt. Mr. Bijou’s court filings show that while the financiers were seeking repayments, Mr. Bijou transferred $533 million to Mr. Morton’s “unknown and unproven hedge fund” Camshaft Capital. I discovered that I was sending money.
Mr Dorsey had previously ordered Mr Morton to appear in court to explain where the funds were kept. Morton told the court that he could not visit him because he was hospitalized in a foreign country, but Dorsey said during Thursday’s court hearing in Wilmington, Delaware, that excuse was not credible. .
Dorsey said Morton did not provide any evidence that he was hospitalized or overseas, nor did he provide the court with a home address or phone number.
“Given his absolute disdain for this court, I have no faith in him,” Dorsey said.
Mr. Dorsey issued a warrant for Mr. Morton’s arrest and said he would fine Mr. Morton and Mr. Camshaft $10,000 per day until they comply with a court order to cooperate in investigating Mr. Bijou’s missing funds.
“He certainly has the financial ability to pay the fine,” Dorsey said. “He knows the whereabouts of $500 million of his debtors’ funds.”
Morton could not be reached for comment. Camshaft’s attorney declined to comment.
In a lawsuit against Morton and Camshaft, Biju’s lenders say the startup never explained why it transferred so much money to Morton, who is in his mid-20s and “doesn’t seem qualified to manage a hedge fund.” Ta. Camshaft had no other significant operations and the address listed as its principal place of business in the filing was International House of Pancakes in Miami, the lenders said.
Byju’s former parent company, Think & Learn Private Ltd, was once valued at $22 billion.
(Reporting by Dietrich Knauth; Editing by Richard Chang)
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