Byju’s faces insolvency proceedings: NCLT accepts BCCI’s petition for Rs 158 crore sponsorship dues

The National Company Law Tribunal (NCLT) has accepted the Board of Control for Cricket in India (BCCI)'s petition to initiate insolvency proceedings against ed-tech company Byju’s. This case revolves around a sponsorship contract between Byju’s and BCCI for the Indian cricket team’s jersey.

BCCI filed the petition last year against Byju’s parent company, Think and Learn Private Limited, to recover ₹158 crore in outstanding dues. The next hearing is scheduled for November 15. Reports suggest that Byju’s is in talks with BCCI to resolve the matter.

Byju’s Owes ₹158.9 Crore to BCCI

In January last year, Byju’s permitted BCCI to encash a bank guarantee worth ₹143 crore. Currently, Byju’s owes ₹158.9 crore. The case, filed by BCCI on September 8, 2023, was heard on November 28.

NCLT Cites Email Trail as Evidence of Byju’s Default

The NCLT Bengaluru bench accepted the petition, noting that the email correspondence between BCCI and Byju’s clearly indicates a default by Think and Learn. The bench appointed Pankaj Srivastava as the Interim Resolution Professional, who is tasked with forming a creditors' committee within 30 days of his appointment.

First Default Occurred on August 21, 2022

According to the order, Think and Learn defaulted on 12 invoices sent by BCCI after several international tours and series of the Indian cricket team. BCCI reported that Byju’s first default occurred on August 21, 2022.

Creditors to Gain Control from Existing Management

Under the Insolvency and Bankruptcy Code (IBC), control of the company will transfer from the existing management to the creditors. Additionally, during Byju’s Corporate Insolvency Resolution Process (CIRP), no assets of the company can be transferred.

Company May Appeal Against the Order

Byju Raveendran, the company’s founder, or any board member may appeal the order to the National Company Law Appellate Tribunal (NCLAT) and subsequently to the Supreme Court. It is noteworthy that NCLT issued a notice to Byju’s during the first hearing, seeking a response.

Prosus Investment Firm Writes Off ₹4,115 Crore Investment

Recently, investment firm Prosus wrote off its investment in Byju’s, acknowledging a loss of approximately ₹4,115 crore. Prosus held a 9.6% stake in the ed-tech company and disclosed this in its annual report.