- From not paying employees on time, to shutdowns of coaching centers, Byju’s has been in the limelight for all the wrong reasons, lately.
- Once valued at a jaw-dropping $22 billion, the ed-tech giant has failed to repay a ₹158 crore debt to BCCI over a sponsorship deal.
- The National Company Law Tribunal (NCLT) in Bengaluru has admitted an insolvency plea filed by the BCCI against Think & Learn Pvt. Limited, the parent company of Byju’s.
What did Byju’s do?
It all started in 2019.
Byju’s failed to pay back a ₹158 crore loan owed to the Board of Control for Cricket in India (BCCI).
The debt in question stems from Byju’s sponsorship of the Indian cricket team’s jerseys. Initially, Byju’s took over the sponsorship from mobile phone manufacturer OPPO in 2019, with the contract originally ending in 2022 and later extended to 2023.
However, amidst mounting financial troubles, Byju’s announced in January 2023 that it would not renew its sponsorship deal with BCCI.
BCCI files insolvency plea against Byju’s
On September 8, 2023, BCCI filed the insolvency plea seeking to initiate the corporate insolvency resolution process (CIRP) against Byju’s.
The BCCI claimed that Byju’s had not honored the payment, despite a general notice issued via email on January 6, 2023.
In November 2023, the National Company Law Tribunal (NCLT) sought a response from Byju’s, which opposed the plea on several grounds.
Byju’s argued that the agreement with BCCI did not involve any “services” and only involved the transfer of certain rights, thus BCCI could not be viewed as an “operational creditor” eligible to file a Corporate Insolvency Resolution Process (CIRP) application under the IBC.
NCLT admits the insolvency plea
In a dramatic turn of events, the NCLT in Bengaluru has admitted an insolvency plea filed by the BCCI against Think & Learn Pvt. Limited, the parent company of ed-tech giant Byju’s.
The tribunal’s verdict
The tribunal stated there was no reason to deny the petition under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, thus initiating the Corporate Insolvency Resolution Process (CIRP) against Byju’s.
A bench comprising Judicial Member K Biswal and Technical Member Manoj Kumar Dubey delivered the order.
The tribunal has also mandated progress reports every two weeks to ensure compliance and transparency.
Byju’s arbitration plea dismissed
Byju’s application to refer the matter to arbitration was dismissed by the tribunal.
Interim resolution professional appointed
The tribunal appointed Pankaj Srivastava as the interim resolution professional (IRP). He will oversee the company’s operations until the Committee of Creditors (COC) is formed.
The order stated, “The Interim Resolution Professional shall, after collation of all the claims received against Think and Learn Pvt Ltd, the Corporate Debtor, and the determination of the financial position of the Corporate Debtor, constitute a Committee of Creditors.”
What next?
Byju’s now stands at a critical juncture.
As the insolvency process unfolds, the ed-tech giant’s future hangs in the balance, awaiting the next move from its creditors, management, and potential buyers.
Let’s see how Byju’s navigates this challenging period.
