Think and Learn Private Ltd. (TLPL), the parent company of edutech Arm Byju, has been rolled into the bankruptcy resolution process. The National Company Law Tribunal (NCLT) admitted a petition moved by the Board of Control for Cricket in India (BCCI) after the firm defaulted on the payment of 2158 crore.
A bench comprising judicial member K. Biswal and technical member Manoj Kumar Dubey appointed Pankaj Srivastava as the interim resolution professional (IRP).
The IRP has to submit his written consent within a week. Once he accepts the appointment, the IRP will be required to send regular progress reports to the tribunal every two weeks. The Bengaluru bench of the tribunal also dismissed Byju’s plea to refer the dispute to arbitration, saying that it was “not maintainable.”.
It is learned that Byju’s is likely to challenge the order at the National Company Law Appellate Tribunal (NCLAT). “We wish to reach an amicable settlement with BCCI, and we are confident that, despite this order, a settlement can be reached. In the mean time, our lawyers are reviewing the order and will take the necessary steps to protect the company’s interests,” said a spokesperson for Byju’s.
Byju Raveendran, founder of the eponymous edutech firm, is at risk of losing management control of the firm that he built in 2011. It was valued at $22 billion in 2022. But since then, Byju’s has lurched from one crisis to another, causing its valuation to crash to less than $200 million. Earlier this year, a clutch of foreign investors, including Prosus and Peak XV (for Merly Sequoia Capital India), voted to remove Raveendran as CEO at an extraordinary general meeting (EGM) on the grounds of “mismanagement and failures.” Raveendran has had failures.”
Raveendran has denied the allegations, denied the allegations, and disregarded the validity of the vote.
The tribunal has asked the IRP to collate the financial claims against the firm and then form a Committee of Creditors (CoC). He has been directed to file a report, certifying the constitution of the panel, with the tribunal within 30 days of his appointment.
With the initiation of the insolvency process, no fresh suits can be filed against the company. The suit also triggers a freeze on Byju’s assets. The two parties entered into a ‘team sponsor agreement’ in July 2019.
The 38-page order said that even though the agreement was supposed to continue until March 31, 2002, the two parties continued with the agreement.
As a result, Byju’s continued to be the sponsor of the Indian cricket teams until March 31, 2023.
The company was required to pay a sum equivalent to 50 percent of the aggregate fee pertaining to a series not later than 30 days prior to the first scheduled match of such series. The rest was to be paid within a period of five days of the last match in that series.
In early 2023, Byju’s said that it would not be renewing its sponsorship deal with BCCI and other bodies like the International Cricket Council (ICC) as it looked to cut costs and emerge as a professional entity.
However, the allegation is that after March 31, 2022, Byju’s made payment in full only against one invoice for the year 2002–23, amounting to Rs 25.35 crore, through an invoice dated May 20, 2022. After that. It failed to make payments against subsequent invoices.