Byju’s appeals to NCLAT Chennai against insolvency; hearing set for July 29

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Byjus, Byju (Photo: Reuters)

3 min read Last Updated : Jul 24 2024 | 11:59 AM IST

The National Company Law Appellate Tribunal (NCLAT) in Chennai is set to hear Byju’s appeal against the insolvency proceedings on July 29, according to a report by Bar and Bench. Senior advocate Pramod Nair, representing Byju’s parent company, Think and Learn, highlighted the urgency of the matter before the NCLAT bench, emphasising the need to pay employee salaries.


Byju’s, once valued at $22 billion and backed by investors such as Prosus and General Atlantic, has recently faced significant challenges, including job cuts, a decline in valuation, and disputes with investors accusing CEO Byju Raveendran of corporate governance issues. The company has denied any wrongdoing.


Byju’s insolvency proceedings


The insolvency proceedings were initiated following a plea by the Board of Control for Cricket in India (BCCI), citing unpaid dues of Rs 158 crore related to sponsorship rights. The National Company Law Tribunal (NCLT) in Bengaluru admitted BCCI’s plea on July 16, triggering the corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC) for Think and Learn. Pankaj Srivastava was appointed as the resolution professional to manage the company’s affairs.


Byju’s faces claims from multiple creditors, including:


– BCCI: Rs 158 crore


– Oppo: Rs 13 crore


– Surfer Technologies: Over Rs 2 crore


– Cogent E Services: Over Rs 6 crore


– McGraw Hill Education India: Approx Rs 1.75 crore


– iEnergizer Services: Approx Rs 13 crore


The total amount due to Byju’s creditors exceeds Rs 200 crore.


Qatar Investment Authority (QIA) case


The Qatar Investment Authority (QIA) has filed a case in the Karnataka High Court, seeking to compel Byju Raveendran to disclose and prevent the transfer of his personal assets, amounting to up to $235.19 million. QIA has a significant investment in Byju’s, including a $250 million loan to Raveendran in March 2022. The total exposure of QIA to Byju’s is around $735 million.


Byju’s ongoing legal disputes


Byju’s is dealing with various financial and legal issues, including a severe cash crunch, delays in financial reporting, legal disputes with lenders and investors, along multiple vendors moving the NCLT to recover dues.


One major dispute involves a $200 million rights issue, with investors such as Prosus, General Atlantic, Sofina, and Peak XV (formerly Sequoia) seeking a stay, alleging mismanagement and challenging the valuation at less than 99 per cent of Byju’s peak valuation of $22 billion.


Byju’s upcoming NCLAT hearing


The urgency of Byju’s appeal is underscored by the need to address these financial challenges and ensure the company’s operational stability, including the payment of employee salaries. The NCLAT’s decision on July 29 will be crucial in determining the future course for Byju’s amid its ongoing financial and legal battles.

 

First Published: Jul 24 2024 | 11:59 AM IST