On August 2, 2024, the National Company Law Appellate Tribunal (NCLAT) in Chennai accepted Byju Raveendran’s appeal to halt insolvency resolution proceedings against Byju’s. This decision follows a settlement between the edtech company and the Board of Control for Cricket in India (BCCI), resolving a ₹158 crore debt related to cricket jersey sponsorship deals.
The NCLAT’s ruling came after a settlement was reached between Byju’s and BCCI, as noted by judicial member Rakesh Kumar Jain and technical member Jatindranath Swain. The settlement, funded personally by Riju Raveendran (Byju’s founder’s brother), was verified as not originating from any credit agreements. The court acknowledged that there was no evidence showing the repayment came from Byju’s Alpha Inc or its corporate assets.
The BCCI had previously petitioned the National Company Law Tribunal (NCLT) in Bengaluru to initiate insolvency proceedings against Byju’s in June. However, with the settlement in place, these proceedings are now halted. The NCLAT’s approval was based on the assurance that the repayment funds are sourced privately and not affecting the financial creditors.
Concerns were raised by a U.S.-based financial creditor about the source of the repayment funds, with claims of a potential link to the $533 million owed by Byju’s to financial creditors. Solicitor General Tushar Mehta clarified that the BCCI would not accept any tainted money and confirmed the payment would be made through proper banking channels.
Senior Advocate Mukul Rohatgi, representing a financial creditor, questioned the transparency of the repayment source, arguing that the financial math did not add up. Byju’s and Riju Raveendran’s legal team countered these claims, accusing GlasTrust of attempting to influence proceedings through U.S. courts.
The NCLAT’s decision to accept the settlement means the insolvency process against Think and Learn (Byju’s parent company) will cease, and the Company of Creditors will not be formed. Byju’s is expected to continue operations without the oversight of the Interim Resolution Professional (IRP) previously appointed by the NCLT.
Should Byju’s default on future payments, creditors may initiate new proceedings under the Insolvency and Bankruptcy Code (IBC).
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