 "Edtech firm Byju's moves NCLAT against NCLT order, seeks urgent hearing")
Cash-strapped Byju’s has moved the National Company Law Appellate Tribunal (NCLAT) against the recent order of National Company Law Tribunal (NCLT), that allowed Indian cricket board’s petition for initiating insolvency proceedings against the edtech company, sources said.
According to sources, Byju's wanted the plea to be heard immediately or on July 19. NCLAT may be able to hear the case in the coming week.
“Byju’s has requested NCLAT for an urgent hearing as soon as possible. It might happen this week or next week,” a person familiar with the development said.
NCLT had admitted Byju's, officially known as Think and Learn Pvt Ltd, into the Corporate Insolvency Resolution Process (CIRP) based on a petition filed by the Board of Control for Cricket in India (BCCI) due to unpaid dues amounting to ~158.90 crore.
Abhishek Manu Singhvi, the senior advocate representing Byju’s in the matter, reportedly said the company is prepared to commit to depositing the entire ~158 crore in one instalment within one month.
Byju’s declined to comment on the issue.
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Due to the NCLT's order, the company’s founder, Byju Raveendran, has lost immediate control of the company. The tribunal appointed a bankruptcy professional to oversee daily operations during the proceedings. With the NCLT appointing Pankaj Srivastava as the interim resolution professional (IRP), time is running out for Byju’s as the committee of creditors (CoC) begins to be formed.
“Pankaj Srivastava had visited the Byju’s office in preparation to oversee the company's daily operations,” said the person. “Byju’s is trying to stay on the NCLT order.”
NCLT’s order has also created anxiety in Byju’s workforce which has now approximately 13,000 members, down from nearly 15,000 at the close of 2023.
Last year, BCCI claimed that Byju’s has defaulted on a payment of ~158 crore. It initiated corporate insolvency proceedings against the beleaguered edtech company at the NCLT.
Last year, Byju’s announced that it plans to end sponsorship of the Indian cricket team jersey, as it focuses on profitability. The crisis-ridden company was going through a strategic restructuring and reorientation of its leadership team to enhance operational efficiency, cut down losses, and achieve profitability.
Earlier this year, Byju’s decided to lay off around 4,000 employees, as part of a restructuring exercise, according to sources.
Last year, Byju’s had three large branding partnerships with the BCCI, International Cricket Council, and Federation Internationale de Football Association. They were to be renewed in 2023, but the company had said it would not renew any of them. Later, gaming firm Dream11 replaced Byju’s as the jersey sponsor of Team India in a deal that has cost the company ~358 crore. This came shortly after the BCCI had announced it was looking for a jersey sponsor after its deal with Byju’s ended abruptly.
Byju’s is besieged by myriad challenges, including a severe cash crunch, delays in financial reporting, and a slew of legal disputes with lenders and investors. At least seven vendors have also moved the NCLT against Byju’s to recover dues.
This includes a tussle between Byju’s and its investors at NCLT and its centres around the company’s $200 million rights issue, with allegations of oppression and mismanagement. Investors Prosus, General Atlantic, Sofina, and Peak XV (formerly Sequoia) have sought a stay on the rights issue, challenging the valuation at less than 99 per cent of Byju’s peak valuation of $22 billion.