Education technology firm Byju's once valued at $22 billion, lands in bankruptcy over BCCI dues
- EP News Service
- Jul 18, 2024
Byju Raveendran founder of Byju's which is now in NCLAT
MUMBAI: Education technology company Byju's, which was at one point in time valued at a whopping $22 billion, has landed in bankruptcy court as it has appealed an insolvency order to the National Company Law Appellate Tribunal (NCLAT), requesting an urgent hearing. The order was issued following a claim by the Board of Control for Cricket in India (BCCI) over Byju's failure to pay Rs 158 crore. The NCLAT is scheduled to hear Byju's appeal on July 22, though the company is seeking an expedited review. Senior advocate Abhishek Manu Singhvi, representing Byju's, assured the tribunal that the company, still solvent and employing thousands, is ready to deposit the full Rs 158 crore in one payment within a month. The tribunal has appointed Pankaj Srivastava as the interim resolution professional to collaborate with creditors and find a resolution applicant for the company.
The BCCI case involves Byju's sponsorship deal, where despite the company's logo being displayed on the Indian men's cricket team jerseys, Byju's did not pay the sponsorship fees to the BCCI. As a result of the insolvency order from the NCLT, Byju's founder, Byju Raveendran, has lost immediate control of the company. A bankruptcy professional, Pankaj Srivastava, has been assigned to manage daily operations during the insolvency proceedings.
The order stated that the Interim Resolution Professional will, after compiling all claims against Think and Learn Pvt Ltd, the corporate debtor, and assessing its financial status, establish a Committee of Creditors. The NCLT also rejected Byju's request to move the dispute to arbitration and ruled that Byju's assets cannot be transferred while under insolvency. According to the Insolvency and Bankruptcy Code (IBC), no lawsuits can be initiated or pursued against Byju's during this period.
In 2019, Byju's replaced Oppo India as the official sponsor of Team India with an initial agreement lasting from September 2019 to March 2022. By June 2022, Byju's extended the sponsorship until November 2023 for about $35 million. Although Byju's sought to end the agreement in December 2022, the BCCI requested that it continue until March 2023 to allow time for new sponsors to take over from the start of the new financial year.
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