BYJU'S Faces Legal Challenges: BCCI's Insolvency Petition Accepted by NCLT
The edtech company BYJU'S expressed optimism that it and the Board of Control for Cricket in India (BCCI) may come to a mutually agreeable resolution after the latter filed a petition to initiate insolvency proceedings due to unpaid dues. Recently, the National Company Law Tribunal (NCLT) Bengaluru court accepted BCCI's arguments in opposition to BYJU'S.
Our goal has always been to resolve the matter amicably with BCCI, and we remain optimistic that this ruling will not derail our efforts." Meanwhile, a representative from BYJU'S stated that their legal team is now examining the order and would proceed with the appropriate measures to safeguard the company's interests.
In October of last year, BCCI filed the plea in response to INR 158 crore in overdue payments. The Indian cricket squad was sponsored by BYJU'S under an agreement with the BCCI. A subsequent hearing was scheduled for November 15th, last year.
The NCLT acknowledged the plea and stated that it is indisputable that BYJU'S parent company, Think & Learn Private Limited, had used the BCCI's services but had not paid.
BYJU'S Multiple Bankruptcy Cases
BYJU'S is currently involved in several bankruptcy lawsuits, both domestic and international, including the one initiated by the BCCI. The decision said that the Corporate Debtor (Think & Learn) admitted in these emails that they owed money and that default had already happened due to numerous requests for extensions of time.
The ruling permitting bankruptcy proceedings against Think & Learn imposes certain restrictions, including a 180-day embargo on the sale, transfer, or disposal of any of the company's assets.
IBC Procedure
If a business files for bankruptcy protection under the Insolvency and Bankruptcy Code (IBC), its creditors will gain control. While BYJU's is amid the Corporate Insolvency Resolution Process (CIRP), all of its debts, including interest, will be frozen, and the transfer of any of its assets will be impossible. IBC also forbids the continuation of pending lawsuits against BYJU'S.
Within one week of receiving the NCLT bench's order, Pankaj Srivastava must provide written permission for his appointment as Interim Resolution Professional (IRP). As per Section 17 of the IBC Act, 2016, if Srivastava's nomination is confirmed, he will have complete control over the management of Think & Learn's operations. The company's board of directors would also be suspended. The bench of the NCLT issued an order directing the IRP to form a Committee of Creditors within 30 days of his appointment, after the compilation of all claims received against Think & Learn.
At the same time, in the fiscal year of 2024, tech investor Prosus spun off its 9.6% ownership in BYJU'S.
Peak XV Partners, General Atlantic, and Prosus are among the investors that have launched an "oppression and mismanagement" lawsuit against BYJU'S.
Nitin Konde
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