Byju’s Faces Insolvency Proceedings: NCLT Accepts BCCI’s Plea Over ₹158 Crore Dues
NCLT’s Bengaluru Bench Accepts Insolvency Petition Against Byju’s
The National Company Law Tribunal (NCLT) Bengaluru Bench has accepted a petition to initiate insolvency proceedings against Byju’s, the edtech company associated with the Board of Control for Cricket in India (BCCI). This matter pertains to the sponsorship contract between Byju’s and BCCI for the Indian cricket team’s jersey.
Last year, BCCI filed this petition against Byju’s parent company, Think & Learn Private Limited, to recover an outstanding amount of ₹158 crore. The next hearing in this case is scheduled for November 15. Byju’s is currently in discussions with BCCI to resolve this issue.
Email Trail Confirms Byju’s Default
The bench stated that the email trail between BCCI and Byju’s indicates that Think & Learn has defaulted. The bench appointed Pankaj Srivastava as the interim resolution professional and directed him to form a committee of creditors within 30 days from the date of appointment.
First Default on August 21, 2022
According to the order, Think & Learn defaulted on a total of 12 invoices raised by BCCI following several international tours and series by the Indian cricket team. BCCI stated that Byju’s first default occurred on August 21, 2022.
Byju’s Owes BCCI ₹158.9 Crore
In January last year, Byju’s allowed BCCI to encash a bank guarantee of ₹143 crore, leaving an outstanding amount of ₹158.9 crore. The case filed by BCCI on September 8, 2023, was heard on November 28.
Creditors to Take Control from Current Management
Under the Insolvency and Bankruptcy Code (IBC), control of the company will now shift from the current management to the creditors. Additionally, while the company is under the Corporate Insolvency Resolution Process (CIRP), Byju’s assets cannot be transferred.
Appeal Options Available
Byju’s founder, Byju Raveendran, or any board member can appeal against this order in the National Company Law Appellate Tribunal (NCLAT) and subsequently in the Supreme Court. It is noteworthy that NCLT had issued a notice to Byju’s seeking a response during the first hearing itself.
Prosus Investment of ₹4,115 Crore Written Off
Recently, investment firm Prosus wrote off its investment in Byju’s, acknowledging a loss of approximately ₹4,115 crore. The firm held a 9.6% stake in the edtech company. This information was disclosed in the investment firm’s annual report.
