The National Company Law Appellate Tribunal (NCLAT) on July 31 deferred accepting a Rs 158-crore settlement between Byju's founder Byju Raveendran and the Board of Control for Cricket in India (BCCI) after the US-based lenders of the embattled edtech firm questioned the source of money.
Calling in a "tainted settlement", the lenders said it was being paid from “stolen money” and requested the tribunal to reject the agreement.
NCLAT asked Raveendran for an undertaking that the source of the money was not tainted and the Byju’s founder didn’t violate its orders in raising the money.
It also asked the lenders of Think and Learn Private Limited, which operates Byju’s, not to constitute the Committee of Creditors (CoC) till August 1 when the case is expected to be heard next.
The National Company Law Tribunal started bankruptcy proceedings against Think and Learn on July 16 on a BCCI complaint of non-payment of dues worth Rs 158 crore. Raveendran challenged the order in NCLAT.
Lawyers for BCCI and Raveendran told NCLAT that they agreed to settle the dispute. Byju's would pay the Indian cricket board on August 2 and 9, the appellate tribunal was told.
The payment would be made by Raveendran's brother Riju, also one of the largest shareholders in the company.
But the Byju's US-based lenders questioned the settlement. “How can someone who cannot even pay salaries pay Rs 150 crore out of the blue?" senior advocate Mukul Rohatgi, who appeared for lenders, said. “Byju and Riju conspired and stole $500 million. It is our money which has been withdrawn by these fellows.”
To support his claim of “tainted money”, Rohatgi read out portions of a judgment delivered by a Delaware court in a bankruptcy case against Byju's US entity Byju’s Alpha.
The May 2024 judgment held that Riju not only failed to make a serious effort to find out what happened to the cash but deceived the court.
“ ‘I conclude Mr. Ravindran’s testimony is not truthful' ”, Rohatgi quoted the judge as saying. Ravindran either knows where the money is being hidden and won’t say, or he refused to find out, the judge had said, referring to $533 million that lenders accused the company of stashing away.
The missing money is at the heart of a fight between lenders owed more than $1.2 billion and Think & Learn. The two sides are battling in courts in Delaware and New York, a Bloomberg report said.
Raveendran told NCLAT that Rs 158 crore was raised by Riju to settle with BCCI and was not tainted.
A day earlier, Solicitor General Tushar Mehta, who appeared for BCCI, said "The matter may be heard tomorrow, they are in talks." NCLAT had moved the hearing by a day.
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