BCCI May Petition NCLT to Have Byju's Bankruptcy Proceedings Withdrawn

Nitin Konde, Varun Bhardwaj

Nov 14, 2024 — 3 min read

BCCI May Request NCLT to Withdraw Byju’s Bankruptcy Case

According to media sources, the Board of Control for Cricket in India (BCCI) is expected to petition the National Company Law Tribunal (NCLT), located in Bengaluru, to have its bankruptcy claim against the ed-tech company Byju's withdrawn.

It may follow the Supreme Court's decision last month to overturn the National Company Law Appellate Tribunal's (NCLAT) October 23 verdict authorising a INR 158 crore settlement between Byju's (Think and Learn Pvt Ltd) and the BCCI.

The NCLAT's previous decision, which had stopped Byju's insolvency procedures after its agreement with the BCCI, is overturned by this ruling. The Supreme Court incorrectly approved the settlement after concluding that the NCLAT had not followed the procedural guidelines set down in the Insolvency and Bankruptcy Code (IBC). The INR 158 crore that the BCCI had placed in an escrow account will now be moved to an escrow account run by the Committee of Creditors (CoC) as a result of this ruling.

Supreme Court’s Further Instructions

According to reports, the court rebuked the NCLAT for ending the Corporate Insolvency Resolution Process (CIRP) too soon. The court further explained that any withdrawal request must be submitted via the Interim Resolution Professional (IRP) rather than by the parties themselves.

According to reports, Byju's US lenders have demanded that the Committee of Creditors be reorganised and that the IRP assigned to Byju's be removed. Arguments in this matter are anticipated to be heard by the NCLT on November 18.

Byju Raveendran, the founder of the struggling education technology business Byju's, declared last month that the once-highest valued startup in India now has no value and that the former empire should be rebuilt from the ground up, brick by brick.

Downfall of Byju’s

Byju's was valued at $22 billion in 2022, but its fortunes have declined because of a severe financial shortage, regulatory problems, and investor disagreements. One such dispute involved a fight with US bankers for $1 billion in outstanding debts, which ultimately led to the company's insolvency.

"To be successful, I simply need to see a 1% likelihood. The outcome of the court order doesn't worry me. No matter what, I'll find a way out." Raveendran recently informed the media from his home in Dubai that there is no problem in the world that cannot be solved.

Current Market Dynamics of Edtech Startups in India

In the last year, over a dozen Indian edtech startups have been bought out, highlighting a difficult funding environment for smaller businesses and causing a wave of consolidation throughout the troubled sector.

The list of recent deals includes the acquisition of test prep company Ekagrata Eduserv by Google-backed edtech startup Adda247, the acquisition of Housing.com cofounder Advitiya Sharma's startup Genius Teacher by Noida-based Schoolnet, the acquisition of Doubtnut by Peak XV-backed Allen Career Institute, and the acquisition of Macmillan Learning India by mid-tier IT services company Happiest Minds. According to industry leaders, the fact that smaller businesses frequently provide distinctive offerings and specialise in specialised fields is what is driving the consolidation.