NCLT admits Byju's parent Think & Learn into insolvency over BCCI dues

Byju's insolvency proceedings were triggered by BCCI's claim of unpaid dues amounting to Rs 158 crore

The National Company Law Tribunal (NCLT) on Tuesday, admitted the ed-tech giant Byju's parent company, Think and Learn Pvt Ltd, into an insolvency resolution process. This action comes in response to a plea filed by the Board of Control for Cricket in India (BCCI) over unpaid dues.

The NCLT's decision on July 16 marks the beginning of a Corporate Insolvency Resolution Process (CIRP) for the embattled ed-tech company. The tribunal has appointed Pankaj Srivastava as the interim resolution professional (IRP) tasked with managing the company until a Committee of Creditors (CoC) is established. The IRP will oversee the collation of claims against Think and Learn and assess the company's financial status to form the CoC.

Byju's and BCCI branding partnerships

Byju's had substantial branding partnerships in 2022 with the BCCI, the International Cricket Council (ICC), and the Federation Internationale de Football Association (FIFA), all of which were set for renewal in 2023. However, the company announced its intention to discontinue these collaborations mid-2023.

The insolvency proceedings were triggered by BCCI's claim of unpaid dues amounting to Rs 158 crore, which arose from a sponsorship contract for the Indian cricket team. The BCCI's case was initially filed on September 8, 2023, and registered by the NCLT on November 15.

With the NCLT's ruling, control of Byju's will now shift from its current management to its creditors. During the CIRP, no assets of Byju's can be transferred, and all debts and interest will remain frozen under a moratorium. The CoC, managed by the IRP, has up to 330 days to find a buyer for the company through a bidding process. If successful, the company could be revived. However, if a buyer is not found within this period, the NCLT may order the liquidation of the company.

Byju's founder, Raveendran, or any board member, retains the right to appeal this order in the National Company Law Appellate Tribunal (NCLAT) and subsequently in the Supreme Court. However, lifting the CIRP remains at the court's discretion.

In addition to the BCCI, several other companies have raised significant claims against Byju's. Surfer Technologies Pvt Ltd is seeking over Rs 2 crore, Cogent E-services has filed for more than Rs 6 crore, McGraw Hill Education India claims approximately Rs 1.75 crore, and iEnergizer Services has claimed around Rs 13 crore.

NCLT's confirms Byju's defaulted on payment

The NCLT dismissed Byju's request to refer the dispute to arbitration, stating there was no basis to deny the BCCI's petition under section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The tribunal confirmed that a debt existed and that Byju's had defaulted on payment.

With the insolvency proceedings underway, Byju's current management will step down, and the company will be run by the creditors through the IRP. The CoC's efforts over the next 330 days will determine whether the company can be sold and revived or will face liquidation.