Supreme Court blocks BCCI, Byju’s bid to halt insolvency proceedings
The Supreme Court has rejected attempts by BCCI and Byju’s to withdraw insolvency proceedings, citing creditor approval requirements despite a proposed settlement.
ADVERTISEMENT
In another blow to embattled edtech giant Byju’s, the Supreme Court has declined to allow the withdrawal of insolvency proceedings against the company, despite a proposed settlement with the Board of Control for Cricket in India (BCCI).
The cricket board, which had filed for insolvency over unpaid sponsorship dues of Rs 158 crore, sought to withdraw the petition after reaching a settlement with Byju’s and receiving assurances of payment from Riju Raveendran, a promoter of the company. Raveendran also petitioned the court, urging a halt to the process in light of the proposed deal.
However, the Supreme Court upheld earlier rulings by the National Company Law Tribunal and the appellate tribunal, which had rejected the withdrawal attempts. Under India’s bankruptcy code, a withdrawal of insolvency proceedings after admission requires approval from 90 percent of the Committee of Creditors, a condition that has not been met in Byju’s case.
US-based lenders represented by GLAS Trust, who hold claims of nearly Rs11,432 crore against Byju’s, have opposed the withdrawal, highlighting the edtech firm’s deepening financial distress. The creditors represented by GLAS Trust make up 99.4 percent of the committee, leaving Byju’s with little room to maneuver as it seeks to stave off insolvency amid mounting challenges at home and abroad.
Recent reports stated that Byju’s founders Byju Raveendran and Divya Gokulnath are planning legal action against Glas Trust and other lenders, seeking $2.5 million in damages for alleged harm to their business and personal reputations.
The lawsuits target parties the founders believe contributed to the downfall of Think & Learn, Byju’s parent company, with some claims already filed against Glas Trust. Last month, Riju Raveendran petitioned the National Company Law Tribunal to remove Glas Trust as a financial creditor and from the Committee of Creditors. Meanwhile, Glas Trust has filed a lawsuit in a U.S. bankruptcy court against Byju’s founders and former Chief Strategy Officer Anita Kishore, accusing them of concealing and misappropriating $533 million from the $1.2 billion loan taken by Byju’s U.S. subsidiary, Alpha.
On July 7, the court held Byju’s in civil contempt for failing to produce documents in the case. Divya Gokulnath, who is participating in the U.S. proceedings, has denied all allegations and challenged the court’s jurisdiction over the claims against her, the report added.
Read more: Beyond Byju’s: Indian ed-tech players ditch glamour for smart, cost-effective advertising
