 |
|
The Supreme Court of India has intervened in the ongoing insolvency proceedings against embattled edtech giant Byju's, issuing an interim order that halts the process until the court determines the validity of a controversial settlement between the company and the Board of Control for Cricket in India (BCCI). The decision comes after a petition by Byju's US-based lender, Glas Trust, challenged the National Company Law Appellate Tribunal (NCLAT)'s decision to allow the settlement, which involved Byju's paying ₹58 crore to BCCI.
The court's concerns stem from several key issues raised by Glas Trust. The lender pointed out the significant financial losses incurred by Byju's parent company, Think & Learn Pvt Ltd, highlighting a loss of ₹8,104.68 crore as of March 2022. This, coupled with the resignation of Byju's auditor in September 2024, fueled concerns about the company's financial transparency and practices. Moreover, Glas Trust contested the settlement itself, arguing that the ₹158 crore paid to BCCI was “tainted” and had been misappropriated from them. The court, in its questioning, expressed concerns about the lack of a comprehensive review by the NCLAT, questioning why Byju's opted for a settlement with BCCI using personal assets while facing a substantial debt burden. This led to the Supreme Court hinting at potentially sending the NCLAT order back for reconsideration.
The saga began in June 2024 when the National Company Law Tribunal (NCLT) in Bengaluru initiated insolvency proceedings against Byju's at the behest of BCCI. The board had alleged that Byju's had defaulted on payments totaling approximately ₹158 crore related to sponsorship deals for the Indian cricket team's jerseys. However, in July, the NCLAT in Chennai halted the insolvency proceedings after BCCI reported reaching a settlement with Byju's. Riju Raveendran, brother and shareholder of Byju's founder Byju Raveendran, agreed to clear the dues using personal funds generated from the sale of Think and Learn's shares between 2015 and 2022. This settlement was formally approved by NCLAT in August, halting bankruptcy proceedings and restoring control to Byju's founder. Glas Trust's appeal to the Supreme Court now challenges this settlement, arguing that the funds used were misappropriated and should not have been used to settle the debt with BCCI.
Source: Supreme Court orders status quo in Byju’s insolvency