Suspended Byju’s directors move bankruptcy tribunal to block creditors from deciding BCCI settlement
The suspended directors of embattled edtech firm Byju’s have approached the National Company Law Appellate Tribunal (NCLAT) to prevent its creditors from deciding on a ₹158 crore settlement with the Board of Control for Cricket in India (BCCI), Mint reported.
Byju’s Committee of Creditors (CoC) includes opposing lenders such as US-based Glas Trust LLC and Aditya Birla Finance.
On Wednesday, Riju Raveendran, a former director of Byju’s and the younger brother of founder Byju Raveendran, argued before NCLAT that the settlement with BCCI had been finalised before the CoC was constituted.
However, the Bengaluru bench of the National Company Law Tribunal (NCLT) had directed BCCI to submit the settlement plea to the CoC for approval to facilitate Byju’s exit from insolvency.
Glas Trust and other lenders have opposed the settlement, labelling the ₹158 crore as "tainted money" and asserting that they should be paid first as financial creditors.
Key implications of the NCLAT ruling
If NCLAT determines that the settlement was finalised before the CoC was formed, Byju’s could exit insolvency, restoring management control to Byju Raveendran. However, if the CoC retains authority over the decision, the company will need approval from the lender-dominated committee.
Currently, Glas Trust holds a 99.41% voting share in the CoC, backed by an ₹11,432 crore claim, while other creditors include Aditya Birla Finance (₹47 crore claim, 0.41% voting share) and Incred Financial Services Ltd (₹20 crore claim, 0.18% voting share).
NCLAT has agreed to hear Raveendran’s plea, with the next hearing scheduled for 3 March.
Byju’s insolvency battle
The CoC has proposed appointing EY’s Shailendra Ajmera—the former resolution professional for bankrupt airline Go First—as the new insolvency expert to manage Byju’s affairs. This follows an NCLT ruling in January, which deemed Pankaj Shrivastava unfit to oversee the process. The tribunal also ordered the reconstitution of the CoC to its 21 August 2024 structure, nullifying the changes made on 31 August 2024.
Byju’s insolvency proceedings stemmed from a ₹158 crore default on payments to BCCI under a jersey sponsorship agreement signed in 2019. While the company and BCCI initially sought a court-approved settlement, NCLT declined to issue an order, prompting Byju’s to escalate the matter to NCLAT in Chennai.
On 2 August 2024, NCLAT dismissed Byju’s insolvency case and approved BCCI’s settlement after Riju Raveendran raised funds to clear the dues, temporarily restoring family control over Byju’s.
However, Glas Trust challenged the settlement in the Supreme Court, arguing that financial creditors should be prioritised over BCCI. On 23 October, the Supreme Court overturned NCLAT’s order, ruling that it had bypassed due process under the Insolvency and Bankruptcy Code (IBC). The apex court directed all parties to return to NCLT for fresh proceedings.
Byju’s downfall
Founded in 2011 by Byju Raveendran and Divya Gokulnath, Byju’s became India’s most valuable edtech startup, attracting global investors and reaching unicorn status.
However, rapid expansion led to financial strain, regulatory scrutiny, and mounting creditor disputes, pushing the company into crisis.
Currently, Byju Raveendran resides in Dubai, while Riju Raveendran lives in London.
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