The National Company Law Appeals Tribunal (NCLAT) quashed insolvency proceedings against the tech giant Byju on Friday, potentially approving the settlement with the Board of Control for Cricket in India (BCCI), reported news agency Reuters. This development marks a significant victory for founder Byju Raveendran but is a setback for US lenders who claim they are owed $1 billion by the company.
Byju's, which was valued at $22 billion in 2022, has faced numerous challenges, including boardroom exits, the resignation of its auditor, and a public dispute with foreign investors over allegations of mismanagement, which the company has denied. The insolvency case was initiated after BCCI claimed that Byju's failed to pay Rs 158 crore in sponsorship dues. The proceedings were halted after co-founder Riju Raveendran agreed to settle the dues by paying the amount himself.
The National Company Law Appeals Tribunal (NCLAT) stated on Friday, "The settlement between the parties is hereby approved and as a result thereof the appeal succeeds."
However, Glas Trust, representing some US lenders to a Byju's group company, opposed the halting of the insolvency process, accusing the Raveendran brothers of using funds owed to lenders to pay off the cricket board. In a court filing dated August 1, Riju Raveendran claimed he settled the cricket board's dues using "personal funds" and through the liquidation of personal assets. Glas Trust has the option to appeal the tribunal's decision to India's Supreme Court.
This development highlights the ongoing financial and legal battles faced by Byju's as it navigates its obligations to both domestic partners and international lenders. The resolution with BCCI may provide some temporary relief and stability, but the company still faces significant scrutiny and challenges from its creditors.
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