New Delhi: The National Company Law Tribunal (NCLT) admitted an insolvency plea against edtech firm Byju’s parent company, Think and Learn Pvt Ltd, on Tuesday (July 16).
The plea was filed by the Board of Control for Cricket in India (BCCI) over unpaid dues related to sponsorship rights worth Rs 158 crore.
The NCLT has appointed an interim resolution professional, Pankaj Srivastava, to oversee Byju’s operations until a committee of creditors (CoC) is constituted. The company’s current management stands suspended, the Economic Times reported.
“The interim resolution professional shall after collation of all the claims received against Think and Learn Pvt Ltd, the corporate debtor, and the determination of the financial position of the corporate debtor constitute a committee of creditors,” the order said.
The tribunal observed that all the pre-requisites for admitting Byju’s into insolvency had been established – debt and default in debt payment.
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In wake of the NCLT order, no new cases can be registered against Byju’s and its assets will be protected under moratorium, preventing their transfer or sale. This will have repercussions on scores of other suits against Byju’s pending before the tribunal, the Economic Times reported
“As we have always maintained, we wish to reach an amicable settlement with the BCCI and we are confident that, despite this order, a settlement can be reached. In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the company’s interests,” said a Byju’s spokesperson.
According to the Economic Times, Byju’s may challenge the order at the National Company Law Appellate Tribunal (NCLAT).
Background
BCCI had filed an insolvency petition against Byju’s last September, claiming a default in payment amounting to Rs 158 crore.
In a hearing in November last year, BCCI’s counsel informed the tribunal that a general notice had been issued to Byju’s on January 6, 2023, with the default amount, excluding tax deducted at source (TDS), reflected in attached invoices.
Byju’s had entered into a jersey sponsorship agreement with BCCI in March 2019 for three years, later extended by one year, and had made payments until September 2022. The dispute concerns unpaid amounts from October 2022 to March 2023. Byju’s requested time from the tribunal to settle the case, as the matter had been referred for arbitration.
