
Byju’s, the well-known edtech giant, has approached the National Company Law Appellate Tribunal (NCLAT) in Chennai to contest an insolvency order issued by the National Company Law Tribunal (NCLT) in Bengaluru. The NCLT had accepted a plea from the Board of Control for Cricket in India (BCCI), initiating insolvency proceedings against Byju’s parent company, Think and Learn Pvt Ltd, over unpaid dues amounting to ₹158 crore linked to a sponsorship deal.
Background of the Dispute
The dispute centers around a sponsorship agreement where Byju’s agreed to sponsor the Indian cricket team’s jerseys. Initially set to conclude in 2022, the contract was extended into 2023. However, Byju’s faced financial struggles, leading to a default on the payment obligations. As a result, BCCI sought to recover the dues through insolvency proceedings.
Legal Actions Taken
Byju’s, represented by Senior Advocate Promod Nair, requested an urgent hearing from the NCLAT, emphasizing the necessity to address the financial obligations, including the payment of salaries to thousands of employees. The NCLAT has scheduled the hearing for July 29, 2024.
The NCLT’s order placed Byju’s under the Corporate Insolvency Resolution Process (CIRP), appointing an interim resolution professional to oversee the company’s affairs during this period. This decision led to Byju’s founder, Byju Raveendran, losing immediate control over the company.
Challenges Facing Byju’s
Byju’s has been grappling with numerous challenges, including significant layoffs, restructuring efforts, and a severe cash crunch. Once valued at $22 billion, the company’s valuation has plummeted amid these ongoing issues. Byju’s aims to resolve the dispute with BCCI and halt the insolvency proceedings to stabilize its operations and safeguard its reputation.
Senior Advocate Abhishek Manu Singhvi, part of Byju’s legal team, indicated that the company is prepared to pay the ₹158 crore dues in a single installment within a month, demonstrating their intent to resolve the financial dispute promptly.
Broader Implications
The legal battles and financial difficulties add to Byju’s list of challenges, including disputes with investors and other financial creditors. The outcome of these proceedings will be crucial in determining Byju’s future trajectory. Byju’s ability to navigate these issues effectively will be pivotal in its efforts to regain stability and continue its operations without further disruptions.
The upcoming hearing at the NCLAT will be a critical juncture for Byju’s, as it seeks to overturn the insolvency order and address its financial and operational challenges comprehensively.