Byju's challenges insolvency order in NCLAT, hearing likely on July 22

Byju's moves NCLAT challenging insolvency order, seeks urgent listing

Education technology firm Byju's on July 18 challenged in the National Company Law Appellate Tribunal (NLCAT) an order that initiated insolvency proceedings against the startup which was once valued at $22 billion.

The appellate tribunal  is expected to hear the appeal on July 22 though the company sought an urgent hearing.

"The company remains solvent with thousands of employees. I am prepared to commit to depositing the entire Rs 158 crore in one instalment within one month," senior advocate Abhishek Manu Singhvi, representing Byju's, told NCLAT.

On July 16, the National Company Law Tribunal (NCLT) admitted Byju’s parent Think and Learn to the insolvency resolution process on a Board of Control for Cricket in India (BCCI) plea over non-payment of Rs 158 crore.

While the edtech company’s logo was emblazoned on the Indian men cricket team’s jersey, it failed to pay sponsorship dues of about Rs 158 crore to the BCCI.

The order means that founder Byju Raveendran has lost immediate control of the company, with the NCLT appointed bankruptcy professional overseeing the firm's day-to-day operations as the proceedings continue.

The tribunal named Pankaj Srivastava as the interim resolution professional (IRP) to run the company.

"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 read.

The NCLT also dismissed Byju's request to refer the dispute to arbitration. It said no assets of Byju's can be transferred while the company is under insolvency.

The Insolvency and Bankruptcy Code (IBC) that governs all such cases also prohibits the institution of any suits or pursuing any existing cases against Byju's.

Byju's, once celebrated as the world’s largest education technology company and a shining example of India's startup success, has now become a cautionary tale of financial mismanagement.

Once valued at an astounding $22 billion, the company's worth has plummeted to less than $1 billion over the years with creditors filing lawsuits to recover debts, coaching centres closing due to unpaid rent, and thousands of employees left hanging without salaries.