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The Bengaluru bench of the National Company Law Tribunal (NCLT) has admitted the Board of Control for Cricket in India’s (BCCI) petition seeking insolvency proceedings against beleaguered edtech firm Byju’s.
The tribunal has appointed Pankaj Srivastava as the interim resolution professional, in charge of running the company until the lenders form a ‘committee of creditors’.
BCCI had sought initiation of insolvency proceedings against Byju’s over alleged unpaid dues of ₹158 crore. Byju’s had a sponsorship contract with BCCI for the Indian cricket team.
Sources said the edtech major Byju’s will attempt to settle the matter with BCCI out of court, besides challenging the NCLAT order.
“As we have always maintained, we wish to reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached. In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the company’s interests,” said a Byju’s spokesperson.
IBC process
Under the Insolvency and Bankruptcy Code (IBC), the control of the company will be transferred to the creditors. Furthermore, no assets of Byju’s can be transferred while the company is under the Corporate Insolvency Resolution Process (CIRP), and all debts and interest on debts will be frozen. IBC also prohibits new suits or pursuit of existing cases against Byju’s.
The CoC will run the company through the IRP/RP for a maximum period of 330 days; if the CoC is able to sell the company to an interested party through a bidding process, the company could be revived. However, if it fails to find a buyer, the NCLT will order the company to be liquidated.
Byju’s ongoing crises
Meanwhile, tech investor Prosus wrote off its 9.6 per cent stake in Byju’s during the financial year 2024.
Byju’s is also entangled in an ‘oppression and mismanagement’ application filed by investors such as Peak XV Partners, General Atlantic, and Prosus.
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